Properties in which an NRI/PIO/OCI can invest in India
RBI allows the following categories to purchase immovable properties in India:
(a) Non-Resident Indian (NRI) - that is a citizen of India residing outside India
(b) Person of Indian Origin (PIO) - that is an individual (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan), who
(i) At any time, held Indian passport or
(ii) Who or either of whose father or whose grandfather was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955).
However, RBI permits an NRI and a Person of Indian Origin (PIO) to purchase any residential or commercial property in India without any permission from RBI. But they are not allowed to buy any agricultural land, plantation property or farmhouse in India without permission from RBI.
Documents required for buying property
- Pan card (Permanent account number)
- OCI/PIO card (In case of OCI/PIO)
- Passport (In case of NRI)
- Passport size photographs
- Address proof
Guidelines on home loan for buying residential accommodation
RBI has permitted banks and Housing Finance Companies (HFCs) affiliated with National Housing bank to provide home loan to NRIs. In accordance with these guidelines, the loans to be given to NRIs shall be on the same basis and criteria which are applicable in case of resident Indians. These would include the loan amount eligibility based on the income, tenure of the loan and the extent to which the lenders can finance purchase of residential house property by NRIs.
The loans are given in Indian Rupees and are repayable in Indian Rupee only. The amount of loan cannot be transferred to the bank account of the NRI. It can only be credited to the seller or the builder. The home loan to NRI is secured by equitable mortgage of the property which the NRI aims to purchase. The lenders can accept any other assets in India as security.
Repayment of home loan
The home loan obtained by NRI from banks/housing finance companies can be serviced through various sources. Since the NRI is working outside India, it is always easy for him to pay the EMI by remittances through banks. The loan can also be repaid through the funds lying in his credit in any of the banking accounts like his NRE account, of his FCNR deposits. Even the home loan taken by him can be repaid out of the funds lying in his NRO account. The RBI allows the rental incomes received on such property to be used for the purpose of servicing of the EMIs.
Protecting your personal information
The rate of interest on the loan shall conform to the directions issued by the Reserve Bank of India or, by the National Housing Bank.