Reserve Bank of India notified very helpful measure in the matter of repayment of loans taken by Non-Resident Indians.The notification was meant to all the Banks authorised to deal in Foreign Exchange.The notification empowers residents to repay the loan taken by theirs close relative non-resident Indians. However the facility is only extended to the Housing Loans.
RBI had already notified Foreign Exchange Management Act provisions in 2000 wherein housing loan provided to a non-resident Indian or a person of Indian origin resident outside India by an authorised dealer or a housing finance institution in India approved by the National Housing Bank for acquisition of a residential accommodation in India, may be repaid by any relative of the borrower in India. The amount can be repaid by crediting the borrower's loan account through the Bank account of such relative. A relative has the same meaning in Section 6 and Schedule IA of Companies Act, 1956. The relatives enlisted in these provisions will be coming under this notification.
The directions are issued by RBI under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999.
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