The general permission granted by RBI covering sale of share acquired under the portfolio investment scheme on repatriation basis by individual NRIs/PIOs is extended to OCBs also.

Loans from NRI Relatives

General Permission will be given by RBI for interest free non-repatriable loans from NRI relatives for personal purposes and for business activities. Interest free repatriable loan upto US$ 2.5 lakhs and maturity of 7 years will be cleared by RBI automatically. Other cases will continue to be cleared by RBI on a case-to-case basis.

Transfer of Funds : NRE Accounts

RBI will permit transfer of funds from one Non Resident External (NRE) account to the NRE account of another person for any purpose.

Companies with NRI Participation

The general permission granted by RBI for subscription to memorandum and articles of association by NRIs is extended to all companies except those engaged in agricultural/plantation activities.

NRO Account Condition

The declaration that the depositor will not make available foreign currency to residents against payment of rupees by credit to the NRO account in India prescribed by RBI for opening NRO accounts by authorised dealers (ADs) has been dispensed with.

Rupee Loan to NRIs

RBI has granted general permission to ADs to sanction rupee loans to NRIs against the security of shares held by them either on repatriation or non-repatriation basis, subject to lending norms.

Remittance of Sale Proceeds of Shares Abroad

NRIs are permitted to raise loans abroad against the security of shares of Indian companies held by them on repatriation basis. However, in case the shares are sold and the amount of sale proceeds is required to be remitted abroad for repaying the loan, prior permission of RBI is required. The aforementioned condition has been waived and ADs are permitted to remit the sale proceeds to the overseas bank who has extended the loan to the NRIs, net of applicable taxes, if any.

Rupee loans against immovable property held in India

NRIs are permitted to raise rupee loans on non-repatriation basis in India against the collateral of their immovable property irrespective of the fact whether the property is purchased by remittances from abroad or acquired otherwise.

ADs Authorised to Extend Rupee Loans to NRIs

RBI has granted permission to certain housing finance companies to extend rupee loans to NRIs for acquisition of houses in India. These loans are required to be repaid by NRIs by sending remittances from abroad. This facility has been extended to ADs who may be willing to extend rupee loans to NRIs for acquisition of residential houses in India subject to the same terms and conditions as applicable to loans granted to NRIs by housing finance companies.

Loans by Indian Companies to their NRI Staff

Indian companies who desire to grant housing loans in India to their NRI staff who have been deputed abroad have been granted general permission to extend such loans under the staff housing loan scheme of the concerned company provided the loans are repaid out of remittances in foreign exchange from abroad by the employee during his period of deputation abroad.

Ceiling of Loans by Housing Finance Institutions

The ceiling on total loan to be advanced and the percentage of the project cost which can be funded, and the purposes for which loans may be given are brought at par with the ceiling and percentage etc. for residents.

Shares of Companies Supplying Second Hand Machinery

The powers for issue of shares to NRIs/OCBs on repatriation basis against payments made by them directly to suppliers in case of second hand machinery are delegated to RBI subject to the condition that the acquisition of machinery fulfils the requirements relating to import of second hand capital goods without license under the Export-Import Policy.

Payment of Interest on Delayed Refunds

RBI has granted general permission to Indian companies for payment of interest on delayed refunds of share subscriptions if such payment of interest is as per SEBI guidelines.

Safe Custody of Securities

The safe custody of securities on behalf of NRIs/PIOs is permitted to be done by institutional custodians besides the ADs.

Investment in Health Sector

Keeping in view the need to augment health services and to facilitate NRI investment, the Government has decided that henceforth the two conditions for investment in the health sector will no longer apply. The conditions were that:

• the Centres are equipped as per the norms specified by the Ministry of Health and Family Welfare and
• 25% of the facilities available in hospital/centres are provided free of cost to poor and the needy.

The Government has decided to remove these conditions following representations received from NRI investors that the conditions stipulating mandatory offer of facilities free of cost would render NRI investments in health sector and diagnostic centres commercially unviable and the condition requiring equipping diagnostic centres as per specified norms is unduly restrictive. It is hoped that the exclusion of these two conditions will facilitate greater NRI investment in the health services sector and will encourage induction of up-to-date diagnostic facilities.