Can an NRI take loan against the security of immovable property in India? Are there any restrictions on the use of loan amount?
Ans. An NRI can borrow against the security of immovable property from authorized Dealer subject to following conditions: a) the loan should be used for meeting the personal requirements or for borrowers own business purposes; and b) loan should not be used for prohibited activities, namely; i) business of chit fund, or ii) Nidhi Company, or iii) Agricultural or plantation activities or in real estate businesses, or construction of farm houses, or iv) Trading in transferable development rights (TDRs), c) The loan amount cannot be remitted outside India. d) Repayment of loan shall be made from out of remittances from abroad or by debit to NRE/FCNR/NRO/NRSR/NRNR account or out of the sale proceeds of shares or securities or immovable property against which such loan was granted.
