| It has been observed that most of the non-resident | | | | The re-payment has to be made through equated |
| Indians (NRI) and persons of Indian origin (PIO) want to | | | | monthly Installments (EMI) through Non - Resident |
| buy a house in India for themselves or for their family. | | | | Ordinary (NRO) account or the Non Resident External |
| Generally, NRIs have a doubt in their mind as to | | | | (NRE) Account. For security, most banks insist that the |
| whether they can invest in a residential house property | | | | first mortgage of the property should be in their name. |
| in India by remitting funds from overseas under the | | | | If the property is under construction then adequate |
| current foreign exchange regulations or not. Let us look | | | | additional security is required such as guarantee of |
| at some of the aspects related to this matter. | | | | third party (either resident or non-resident). |
| An NRI refers to an Indian citizen who is residing | | | | The Government of India in 1991 embarked on |
| outside India. | | | | liberalization and economic reforms with a view to |
| They can acquire any immovable property in India | | | | bring about rapid and substantial economic growth and |
| other than agricultural land, plantation and farmhouse. | | | | move towards globalization of the economy. As a part |
| These days a number of options are available to buy | | | | of the reforms process, the Government under its |
| houses of international standard with all the facilities | | | | New Industrial Policy revamped its foreign investment |
| such as clubhouse and gymnasium. An NRI may use | | | | policy recognizing the growing importance of foreign |
| his own funds to acquire immovable property. He can | | | | direct investment as an instrument of technology |
| also avail of a home loan for this purpose. | | | | transfer, augmentation of foreign exchange reserves |
| Interest rates for NRI home loans do not vary much | | | | and globalization of the Indian economy. |
| from that of the Indians living in this country. But the | | | | Simultaneously, the Government, for the first time, |
| loans are sanctioned only for a shorter period. An NRI | | | | permitted portfolio investments from abroad by foreign |
| gets only 85% of cost of home as loan amount. The | | | | institutional investors in the Indian capital market. |
| size of the loan depends upon the borrower's | | | | Basically, foreign direct investment relates to direct |
| repayment capacity. Up to 36 times of the gross | | | | investment in an Indian company either through a joint |
| monthly earnings of the applicant may be issued as | | | | venture agreement or as a wholly owned subsidiary |
| loan. However, there is a maximum limit. Calculation of | | | | with management interest. Foreign direct investment is |
| eligibility for NRI home loans is same as that of Indians | | | | also permitted through the route of Global Depository |
| living in the country. | | | | Receipt/Euro issue/FCCB. |