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      • 1. Short title
      • 2. Authority for authentication and the manner of authentication of documents
      • 1. Short title and commencement
      • 2. Definitions
      • 3.
      • 4. Power of Reserve Bank to compound contravention
      • 5. The Power of Enforcement Directorate to compound contraventions
      • 6.
      • 7.
      • 8. Procedure for compounding
      • 9. Payment of amount compounded
      • 10.
      • 11.
      • 12. Contents of the order of the Compounding Authority
      • 13. Copy of the order
      • 1. Short title and commencement
      • 2. Definitions
      • 3. Acquisition and transfer of property in India by an Indian citizen resident outside India
      • 4. Acquisition and transfer of property in India by a person of Indian origin
      • 5. Acquisition of immovable property for carrying on a permitted activity
      • 5-A. Purchase/sale of immovable property by Foreign Embassies/ Diplomats/Consulate Generals
      • 6. Repatriation of sale proceeds
      • 7. Prohibition on acquisition or transfer of immovable property in India by citizens of certain countries
      • 8. Prohibition on transfer of immovable property in India
      • 1. Short title and commencement
      • 2. Definitions
      • 3. Restriction on acquisition or transfer of immovable property outside India
      • 4. Exemptions
      • 5. Acquisition and transfer of immovable property outside India
      • 1. Short title and commencement.
      • 2. Definitions.
      • 3. Restriction on acquisition or transfer of immovable property outside India.
      • 4. Exemptions.
      • 5. Acquisition and Transfer of Immovable Property outside India.
      • 1. Short title and commencement.
      • 2. Definitions.
      • 3. Acquisition and Transfer of Property in India by a NonResident Indian or an Overseas Citizen of India.
      • 4. Acquisition of Immovable Property for carrying on a permitted activity.
      • 5. Purchase/sale of Immovable Property by Foreign Embassies/Diplomats/Consulate Generals.
      • 6. Joint acquisition by the spouse of an NRI or an OCI.
      • 7. Acquisition by a LongTerm Visa holder.
      • 8. Repatriation of sale proceeds.
      • 9. Prohibition on acquisition or transfer of immovable property in India by citizens of certain countries.
      • 10. Prohibition on transfer of immovable property in India.
      • 11. Miscallaneous.
      • 12. Saving.
      • 1. Short title and commencement
      • 2. Definitions
      • 3. Appointment of Adjudicating Authority
      • 4. Holding of inquiry
      • 5. Form of appeal
      • 6. Procedure before Special Director (Appeals)
      • 7. Contents of the order in appeal
      • 8. Representation of party
      • 9. Service of notices, requisitions or orders
      • 10. Form of appeal
      • 11. Procedure before Appellate Tribunal
      • 12. Contents of the order in appeal
      • 13. Representation of party
      • 14. Service of notices, requisitions or orders
      • 1. Short title and commencement
      • 2. Definitions
      • 3. Prohibition to borrow or lend in foreign exchange
      • 4. Borrowing and lending in foreign exchange by an authorised dealer
      • 5. Borrowing and lending in foreign exchange by persons other than authorised dealer
      • 6. Other borrowings in foreign exchange under automatic route or with prior approval of the Reserve Bank of India under the approval route or as trade credit
      • 1. Short title and commencement
      • 2. Definitions
      • 3. Prohibition on borrowing and lending in rupees
      • 4. Borrowing in rupees by persons other than companies in India
      • 5. Borrowing in rupees by Indian companies
      • 6. Restriction on use of borrowed funds
      • 7. Loans in rupees to non-residents
      • 8. Providing housing loan in rupees to a non-resident
      • 8-A. Rupee loans to NRI/PIO employees of Indian body corporate
      • 9. Continuance of rupee loan/overdraft to resident who becomes a person resident outside India
      • 10. Continuance of rupee loan in the event of change in the residential status of the lender
      • 11. Overdraft in rupee account maintained with authorised dealer in India by a bank outside India
      • 1. Short Title and Commencement.
      • 2. Definitions.
      • 3. Prohibition to Borrow or Lend.
      • 4. Borrowing from outside India in Foreign Exchange by a Person Resident in India.
      • 5. Lending in Foreign Exchange by a Person Resident in India.
      • 6. Borrowing in Indian Rupees by a Person Resident in India.
      • 7. Lending in Indian Rupees by a Person Resident in India.
      • 7A. Borrowing and lending by persons resident outside India.
      • 8. Continuation of loan in the event of change in the residential status of the lender/borrower.
      • 9. Any borrowing under erstwhile regulations can be continued as permitted up to the due date of repayment.
      • 1. Short title and commencement.
      • 2. Definitions.
      • 3.
      • 4. Inbound merger.
      • 5. Outbound merger.
      • 6. Valuation.
      • 7. Miscellaneous.
      • 8. Reporting.
      • 9. Deemed approval.
      • 1. Short title and commencement
      • 2. Definitions
      • 3. Prohibition on drawal of foreign exchange
      • 4. Prior approval of Government of India
      • 5. Prior approval of Reserve Bank
      • 6.
      • 7. Use of International Credit Card while outside India
      • 1. Short title and commencement.
      • 2. Definitions.
      • 3. Restriction on investment by a person resident outside India.
      • 4. Restriction on receiving investment.
      • 5. Permission for making investment by a person resident outside India.
      • 6. Merger or demerger or amalgamation of Indian companies.
      • 7. Taxes and Remittance of sale proceeds.
      • 1. Short title and commencement
      • 2. Definitions
      • 3. Restrictions on deposits between a person resident in India and a person resident outside India
      • 4. Exemptions
      • 5. Acceptance of deposits by an authorised dealer/authorised bank from persons resident outside India
      • 6. Other deposits made or held by authorised dealer
      • 7. Acceptance of deposits by persons other than authorised dealer/ authorised bank
      • 8. Deposits in certain other cases
      • 9. Acceptance of deposits by authorised dealer with the prior approval of Reserve Bank
      • 10. Nomination
      • 1. Short title and commencement.
      • 2. Definitions.
      • 3. Restrictions on deposits between a person resident in India and a person resident outside India.
      • 4. Exemptions.
      • 5. Acceptance of deposits by an authorised dealer/authorised bank from persons resident outside India.
      • 6. Acceptance of deposits by persons other than authorised dealer/ authorised bank.
      • 7. Other deposits made or held by authorised dealer.
      • 8. Nomination.
      • 1. Short title and commencement
      • 2. Definitions
      • 3. Delivery of draft, cheque and other instrument for encashment
      • 4. Encashment of draft, cheque or other instrument
      • 5. Opening an account
      • 6. Indemnity
      • 7. Direction for payment of the proceeds
      • 8. Payment of interest on the seized Indian currency
      • 1. Short title and commencement
      • 2. Definitions
      • 3. Prohibition against establishing branch or office in India
      • 4. Prohibition against establishing a branch or office in India by citizens of certain countries
      • 5. Application to Reserve Bank for opening branch or liaison office
      • 6. Activities which may be undertaken by the branch or office in India
      • 7. Remittance of profit or surplus
      • 1. Short title and commencement
      • 2. Definitions.
      • 3. Prohibition against opening a branch office or a liaison office or a project office or any other place of business in India.
      • 4. Approval for opening a branch office or a liaison office or a project office or any other place of business in India.
      • 5. Approval of the Reserve Bank in certain cases for establishment of branch office, liaison office or project office or any other place of business in India.
      • 1. Short title and commencement
      • 2. Definitions
      • 3. Export and import of Indian currency and currency notes
      • 4. Prohibition on export of Indian coins
      • 5. Prohibition on export and import of foreign currency
      • 6. Import of foreign exchange into India
      • 7. Export of foreign exchange and currency notes
      • 8. Export and import of currency to or from Nepal and Bhutan
      • 1. Short title & commencement.
      • 2. Definitions.
      • 3. Export and Import of Indian currency and currency notes.
      • 4. Prohibition on Export of Indian coins.
      • 5. Prohibition on export and import of foreign currency.
      • 6. Import of foreign exchange into India.
      • 7. Export of foreign exchange and currency notes.
      • 8. Export and import of currency to or from Nepal and Bhutan.
      • 1. Short title and commencement
      • 2. Definitions
      • 3. Declaration as regards export of goods and services
      • 4. Exemptions
      • 5. Indication of importer-exporter code number
      • 6. Authority to whom declaration is to be furnished and the manner of dealing with the declaration
      • 7. Evidence in support of declaration.
      • 8. Manner of payment of export value of goods
      • 9. Period within which export value of goods/software to be realised
      • 10. Export on elongated credit terms
      • 11. Submission of export documents
      • 12. Transfer of documents
      • 13. Payment for the export
      • 14. Certain exports requiring prior approval
      • 15. Delay in receipt of payment
      • 16. Advance payment against exports
      • 17. Issue of directions by Reserve Bank in certain cases
      • 18. Project exports
      • 1. Short title and commencement.
      • 2. Definitions.
      • 3. Declaration of exports.
      • 4. Exemptions.
      • 5. Indication of importer-exporter code number.
      • 6. Authority to whom declaration is to be furnished and the manner of dealing with the declaration.
      • 7. Evidence in support of declaration.
      • 8. Manner of payment of export value of goods.
      • 9. Period within which export value of goods/software/ services to be realised.
      • 10. Submission of export documents.
      • 11. Transfer of documents.
      • 12. Payment for the Export.
      • 13. Certain Exports requiring prior approval.
      • 14. Delay in Receipt of Payment.
      • 15. Advance payment against exports.
      • 16. Issue of directions by Reserve Bank in certain cases.
      • 17. Project exports.
      • 1. Short title and commencement
      • 2. Definitions
      • 3. Restriction on holding foreign currency account by a person resident in India
      • 4. Opening, holding and maintaining an Exchange Earner's Foreign Currency Account
      • 5. Opening, holding and maintaining a Resident Foreign Currency Account
      • 5-A. Opening, holding and maintaining a Resident Foreign Currency (Domestic) Account
      • 6. Opening, holding and maintaining a Foreign Currency Account in India in certain other cases
      • 6-A. Foreign Currency Account of a Unit in a Special Economic Zone
      • 7. Opening, holding and maintaining a Foreign Currency Account outside India
      • 8. Limit on holding in a Foreign Currency Account
      • 9. Types of accounts
      • 10. Remittances out of the accounts after the account holder's death
      • 11. Responsibility of authorised dealers maintaining foreign currency accounts
      • 1. Short title and commencement.
      • 2. Definitions.
      • 3. Restriction on holding foreign currency account by a person resident in India.
      • 4. Opening, holding and maintaining Foreign Currency Accounts in India.
      • 5. Opening, holding and maintaining a Foreign Currency Account outside India.
      • 6. Types of accounts.
      • 7. Remittances out of the account after the account holder's death.
      • 8. Responsibility of authorised dealers maintaining foreign currency accounts.
      • 1. Short title and commencement.
      • 2. Definitions.
      • 3. Prohibition.
      • 4. Permission to a person resident in India to enter into a Foreign Exchange Derivative Contract.
      • 5. Permission to a person resident outside India to enter into a Foreign Exchange Derivative Contract.
      • 5A. Permission to a person resident in India to enter into currency futures or currency options
      • 5C. Permission to resident and nonresident entities to undertake hedge transactions with simplified procedures.
      • 6. Commodity hedge.
      • 6A. Freight hedge.
      • 7. Remittance related to a Foreign Exchange Derivative Contract.
      • 8. Remittance related to a Commodity Derivative Contract.
      • 1. Short title and commencement
      • 2. Definitions
      • 3. Prohibition
      • 4. Guarantees which may be given by an authorised dealer
      • 5. Guarantees which may be given by persons other than an authorised dealer
      • 1. Short title and commencement
      • 2. Definitions
      • 3. Permission to take or hold a general insurance policy issued by an insurer outside India
      • 4. Permission to take or hold a life insurance policy issued by an insurer outside India
      • 1. Short Title and Commencement.
      • 2. Definitions.
      • 3. Permission to take or hold a general insurance policy issued by an insurer outside India.
      • 4. Permission to take or hold a life insurance policy issued by an insurer outside India.
      • 1. Short title and commencement.
      • 2. Definitions.
      • 3.
      • 4.
      • 5.
      • 1. Short title and commencement
      • 2. Definitions
      • 3. Restrictions on investment in a firm or a proprietary concern in India by a person resident outside India
      • 4. Permission for investment in certain cases
      • 5. Permission to a firm or a proprietary concern to make payment to a non--resident Indian or a person of Indian origin who has made investment
      • 1. Short title and commencement
      • 2. Definitions
      • 3. Prohibition on transfer or issue of security
      • 4. Transfer or issue of security with the permission of Reserve Bank
      • 1. Short title and commencement
      • 2. Definitions
      • 3. Manner of receipt in foreign exchange
      • 4. Payment for export in certain cases
      • 5. Manner of payment in foreign exchange
      • 6. Manner of payment in certain cases
      • 1. Short title & commencement.
      • 2. Definitions.
      • 3. Mode of Payment and Remittance of sale proceeds.
      • 4. Reporting Requirements.
      • 5. Delays in reporting.
      • 1. Short title and commencement
      • 2. Definitions
      • 3. Permissible capital account transactions
      • 4. Prohibition
      • 5. Method of payment for investment
      • 6. Declaration to be furnished
      • 1. Short title and commencement
      • 2. Definitions
      • 3. Limits for possession and retention of foreign currency or foreign coins
      • 4. Possession of foreign exchange by a person resident in India but not permanently resident therein
      • 1. Short title & commencement.
      • 2. Definitions.
      • 3. Limits for possession and retention of foreign currency or foreign coins.
      • 4. Possession of foreign exchange by a person resident in India but not permanently resident therein.
      • 1. Short title and commencement
      • 2. Definitions
      • 3. Duty of persons to realise foreign exchange due
      • 4. Manner of repatriation
      • 5. Period for surrender of realised foreign exchange
      • 6. Period for surrender in certain cases
      • 6-A. Period for surrender of received/realised/unspent/unused foreign exchange by resident individuals
      • 7. Exemption
      • 1. Short title and commencement.
      • 2. Definitions.
      • 3. Duty of persons to realise foreign exchange due.
      • 4. Manner of Repatriation.
      • 5. Period for surrender of realised foreign exchange.
      • 6. Period for surrender in certain cases.
      • 7. Period for surrender of received/ realised/ unspent/ unused foreign exchange by Resident individuals.
      • 8. Exemption.
      • 1. Short title and commencement.
      • 2. Definitions.
      • 3.
      • 4. Regularization of assets held abroad by persons resident in India.
      • 1. Short title and commencement
      • 2. Definitions
      • 3. Prohibition on remittance outside India of assets held in India
      • 4. Permission for remittance of assets in certain cases
      • 5. Permission to an Indian entity to remit funds in certain cases
      • 6. Reserve Bank's prior permission in certain cases
      • 1. Short title and commencement.
      • 2. Definitions.
      • 3. Prohibition on Remittance outside India of assets held in India.
      • 4. Permission for remittance of assets in certain cases.
      • 5. Permission to an Indian entity to remit funds in certain cases.
      • 6. Permission for remittance of assets on closure or remittance of winding up proceeds of branch office/ liaison office (other than project office).
      • 7. Reserve Bank's prior permission in certain cases.
      • 8. Payment of taxes.
      • 1. Short title and commencement
      • 2. Appointment of Chairperson and Members of Appellant Tribunal on ad hoc basis
      • 1. Short title and commencement.
      • 2. Definitions.
      • 3. Restriction on issue or transfer of security by a person resident outside India.
      • 4. Restriction on an Indian entity to issue security to a person resident outside India or to record a transfer of security from or to such a person in its books.
      • 5. Permission for purchase of shares by certain persons resident outside India.
      • 6. Acquisition of right shares.
      • 6-A. Acquisition of bonus shares.
      • 6-B. Report to RBI.
      • 7. Issue and acquisition of shares after merger or de-merger or amalgamation of Indian companies.
      • 8. Issue of shares under Employees Stock Options Scheme to persons resident outside India.
      • 9. Transfer of shares and convertible debentures of an Indian company by a person resident outside India.
      • 10. Prior permission of Reserve Bank in certain cases for transfer of security.
      • 11. Remittance of sale proceeds.
      • 1. Short title and commencement
      • 2. Definitions
      • 3. Prohibition on issue or transfer of foreign security
      • 4. Purchase and sale of foreign security by a person resident in India
      • 5. Prohibition on direct investment outside India
      • 6. Permission for direct investment in certain cases
      • 6-A. General permission for investment in agricultural operations overseas directly or through overseas offices
      • 6-B. General permission for investment in equity of a company registered overseas
      • 6-C. Investment by mutual funds
      • 7. Investment by Indian party engaged in financial services sector
      • 8. Omitted.
      • 9. Approval of Reserve Bank in certain cases
      • 9-A. Overseas investments by Registered Trust/Society
      • 10. Unique Identification Number
      • 11. Investment by capitalisation
      • 12. Export of goods towards equity procedure
      • 13. Post investment changes/additional investment in existing JV/WOS
      • 14. Acquisition of a foreign company through bidding or tender procedure
      • 15. Obligations of the Indian party
      • 16. Transfer by way of sale of shares of a JV/WOS outside India
      • 17. Transfer by way of sale of shares involving write-off
      • 18. Pledge of shares of Joint Ventures and Wholly Owned Subsidiaries
      • 19. Prior permission of the Reserve Bank for a proprietary concern in India to accept shares
      • 19-A. Overseas investments—Proprietorship concerns
      • 20. Investment by individuals
      • 21. Prohibition on issue of foreign security by a person resident in India
      • 22. Permission for purchase/acquisition of foreign securities in certain cases
      • 23. Transfer of a foreign security by a person resident in India
      • 24. General permission for acquisition of foreign securities as qualification/rights shares
      • 25. Prior permission from Reserve Bank in certain cases
      • 26. Investment by mutual funds and venture capital funds
      • 27. Opening of demat accounts by clearing corporations of stock exchanges and clearing members
      • 1. Short title and commencement.
      • 2. Definitions.
      • 3. Restriction on investment by a person resident outside India.
      • 4. Restriction on receiving investment.
      • 5. Permission for making investment by a person resident outside India.
      • 6. Acquisition through a rights issue or a bonus issue.
      • 7. Issue of shares under Employees Stock Options Scheme to persons resident outside India.
      • 8. Issue of Convertible Notes by an Indian startup company.
      • 9. Merger or demerger or amalgamation of Indian companies.
      • 10. Transfer of capital instruments of an Indian company by or to a person resident outside India.
      • 11. Pricing Guidelines.
      • 12. Taxes and Remittance of sale proceeds.
      • 13. Reporting requirements.
      • 14. Downstream Investment.
      • 15. Prohibited activities for investment by a person resident outside India.
      • 16. Permitted sectors, entry routes and sectoral caps for total foreign investment.
      • 1. Short title and commencement
      • 2. Definitions
      • 3.
      • 4.
      • 5.
      • 6.
      • 7.
      • 8.
      • 1. Short title, extent, application and commencement.
      • 2. Definitions.
      • 3. Dealing in foreign exchange, etc.
      • 4. Holding of foreign exchange, etc.
      • 5. Current account transactions.
      • 6. Capital account transactions.
      • 7. Export of goods and services.
      • 8. Realisation and repatriation of foreign exchange.
      • 9. Exemption from realisation and repatriation in certain cases.
      • 10. Authorised person.
      • 11. Reserve Banks powers to issue directions to authorised person.
      • 12. Power of Reserve Bank to inspect authorised person.
      • 13. Penalties.
      • 14. Enforcement of the orders of Adjudicating Authority.
      • 15. Power to compound contravention.
      • 16. Appointment of Adjudicating Authority.
      • 17. Appeal to Special Director (Appeals).
      • 18. Establishment of Appellate Tribunal.
      • 19. Appeal to Appellate Tribunal.
      • 20. Composition of Appellate Tribunal.
      • 21. Qualifications for appointment of Chairperson, Member and Special Director (Appeals).
      • 22. Term of office.
      • 23. Terms and conditions of service.
      • 24. Vacancies.
      • 25. Resignation and removal.
      • 26. Member to act as Chairperson in certain circumstances.
      • 27. Staff of Appellate Tribunal and Special Director (Appeals).
      • 28. Procedure and powers of Appellate Tribunal and Special Director (Appeals).
      • 29. Distribution of business amongst Benches.
      • 30. Power of Chairperson to transfer cases.
      • 31. Decision to be by majority.
      • 32. Right of appellant to take assistance of legal practitioner or chartered accountant and of Government, to appoint presenting officers.
      • 33. Members, etc., to be public servants.
      • 34. Civil Court not to have jurisdiction.
      • 35. Appeal to High Court.
      • 36. Directorate of Enforcement.
      • 37. Power of search, seizure, etc.
      • 38. Empowering other officers.
      • 39. Presumption as to documents in certain cases.
      • 40. Suspension of operation of this Act.
      • 41. Power of Central Government to give directions.
      • 42. Contravention by companies.
      • 43. Death or insolvency in certain cases.
      • 44. Bar of legal proceedings.
      • 44A. Powers of Reserve Bank not to apply to International Financial Services Centre.
      • 45. Removal of difficulties.
      • 46. Power to make rules.
      • 47. Power to make regulations.
      • 48. Rules and regulations to be laid before Parliament.
      • 49. Repeal and saving.
      • 1. Short title and commencement
      • 2.
      • 3. Object and construction of these regulations
      • 4. Overriding effect
      • 5. Withdrawal of general permission and unwinding of investments and transactions
      • 6. Permission to hedge certain transactions
      • 1. Short title and commencement.
      • 2. Definitions.
      • 3. Manner of Receipt in Foreign Exchange.
      • 4. Manner of Receipts in certain cases.
      • 5. Manner of payment in foreign exchange.
      • 6. Manner of Payment in certain cases.

The Foreign Exchange Management (Borrowing And Lending In Rupees) Regulations, 2000

Published vide G.S.R. 387(E), dated 3.5.2000, published in the Gazette of India, Extraordinary, Part II, Section 3(i), dated 5.5.2000.

11/562

In exercise of the powers conferred by clause (e) of sub-section (3) of section 6, sub-section (2) of section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999), the Reserve Bank of India makes the regulations relating to borrowing and lending in rupees between a person resident in India and a person resident outside India as under, namely:-

1. Short title and commencement .-(1) These regulations may be called The Foreign Exchange Management (Borrowing and Lending in Rupees) Regulations, 2000.

(2) They shall come into force on 1st day of June, 2000.

2. Definitions .-In these regulations, unless the context requires otherwise,-

(a) "Act" means the Foreign Exchange Management Act, 1999 (42 of 1999);

(b) "authorised dealer", "authorised bank", "Non-resident Indian (NRI)", "Person of Indian origin", "Overseas Corporate Body (OCB)", "NRE account", "NRO account", "NRNR account", "NRSR account", and "FCNR account" shall have the same meanings as assigned to them respectively in Foreign Exchange Management (Deposits) Regulations, 2000 made by Reserve Bank under clause (f) of sub-section (3) of section 6 of the Act;

(c) "housing finance institution" and "National Housing Bank" shall have the meaning assigned to them in the National Housing Bank Act, 1987 (53 of 1987);

[(ca) Liberalised Remittance Scheme means the scheme formulated in terms of circular A.P (DIR Series) Circular No. 64 dated February 4, 2004 and as amended from time to time.

(cb) 'relative' means a 'relative' as defined in section 6 of the Companies Act, 1956.]

(d) "Transferable Development Rights (TDR)" shall have the meaning as assigned to it in the Foreign Exchange Management (Permissible Capital Account Transactions) Regulations, 2000;

(e) The words and expressions not defined in these regulations but defined in the Act shall have the same meanings respectively assigned to them in the Act.

3. Prohibition on borrowing and lending in rupees .-Save as otherwise provided in the Act, rules or regulations made thereunder, no person resident in India shall borrow in rupees from, or lend in rupees to, a person resident outside India.

Provided that the Reserve Bank may, for sufficient reasons, permit a person resident in India to borrow in rupees from, or lend in rupees to, a person resident outside India.

Explanation .-For the removal of doubt, it is clarified that use of Credit Card in India by a person resident outside India shall not be deemed as borrowing or lending in rupees.

4. Borrowing in rupees by persons other than companies in India .-A person resident in India, not being a company incorporated in India, may borrow in rupees on non-repatriation basis from a non-resident Indian or a person of Indian origin resident outside India, subject to the following conditions:-

(i) the amount of loan shall be received by way of inward remittance from outside India or out of Non-resident External (NRE)/Non-resident Ordinary (NRO)/Foreign Currency Non-resident (FCNR)/Non-resident Non-repatriable (NRNR)/Non-resident Special Rupee (NRSR) account of the lender maintained with an authorised dealer or an authorised bank in India,

(ii) the period of loan shall not exceed three years;

(iii) the rate of interest on the loan shall not exceed two percentage points over the Bank rate prevailing on the date of availment of loan;

(iv) where the loan is made out of funds held in Non-resident Special Rupee (NRSR) account of the lender, payment of interest and repayment of loan shall be made by credit to that account; and in other cases, payment of interest and repayment of loan shall be made by credit to the lender's Non-resident Ordinary (NRO) or Non-resident Special Rupee (NRSR) account as desired by the lender; and

(v) the amount borrowed shall not be allowed to be repatriated outside India.

5. Borrowing in rupees by Indian companies .-(1) Subject to the provisions of sub-regulations (2) and (3), a company incorporated in India may borrow in rupees on repatriation or non-repatriation basis, from a non-resident Indian or a person of Indian origin resident outside India or [* * *], by way of investment in Non-convertible Debentures (NCDs) subject to the following conditions:-

(i) the issue of Non-convertible Debentures (NCDs) is made by public offer;

(ii) the rate of interest on such Non-convertible Debentures (NCDs) does not exceed the prime lending rate of the State Bank of India as on the date on which the resolution approving the issue is passed in the borrowing company's General Body Meeting, plus 300 basis points;

(iii) the period for redemption of such Non-convertible Debentures (NCDs) is not be less than three years;

(iv) the borrowing company does not and shall not carry on agricultural/plantation/real estate business/Trading in Transferable Development Rights (TDRs) or does not and shall not act as Nidhi or Chit Fund company;

(v) the borrowing company files with the nearest office of the Reserve Bank, not later than 30 days from the date-

(A) of receipt of remittance for investment in Non-convertible Debentures (NCDs), full details of the remittances received, namely; (a) a list containing names and addresses of Non-resident Indians (NRIs)/Overseas Corporate Bodies (OCBs) who have remitted funds for investment in Non-convertible Debentures (NCDs) on repatriation and/or non-repatriation basis, (b) amount and date of receipt of remittance and its rupee equivalent; and (c) names and addresses of authorised dealers through whom the remittance has been received;

(B) of issue of Non-convertible Debentures (NCDs), full details of the investment, namely; (a) a list containing names and addresses of Non-resident Indians (NRIs)/Overseas Corporate Bodies (OCBs) and number of Non-convertible Debentures (NCDs) issued to each of them on repatriation and/or non-repatriation basis, and (b) a certificate from the Company Secretary of the borrowing company that all provisions of the Act, rules and regulations in regard to issue of Non-convertible Debentures (NCDs) have been duly complied with.

(2) The borrowing by issue of non-convertible debentures on repatriation basis shall be subject to the following additional conditions, namely:-

(a) the percentage of Non-convertible Debentures (NCDs) issued to Non-resident Indians (NRIs)/Overseas Corporate Bodies (OCBs) to the total paid-up value of each series of Non-convertible Debentures (NCDs) issued shall not exceed the ceiling prescribed for issue of equity shares/convertible debentures for foreign direct investment in India as specified by the Reserve Bank from time to time, under the relevant regulations, and

(b) the amount of investment is received by remittance from outside India through normal banking channels or by transfer of funds held in the investor's Non-resident External (NRE)/Foreign Currency Non-resident (FCNR) account maintained with an authorised dealer or an authorised bank in India;

(3) The borrowing by issue of Non-convertible Debentures (NCDs) on non-repatriation basis shall be subject to the following additional conditions, namely:-

(a) the amount of investment is received either by remittance from outside India through normal banking channels or by transfer of funds held in the investor's Non-resident External (NRE)/Non-resident Ordinary (NRO)/Foreign Currency Non-resident (FCNR)/Non-resident Non-repatriable (NRNR)/Non-resident Special Rupee (NRSR) account maintained with an authorised dealer or an authorised bank in India,

(b) where the investment is made out of funds held in Non-resident Special Rupee (NRSR) account, the interest on such Non-convertible Debentures (NCDs) shall also not be repatriable outside India; and the maturity proceeds and interest on such debentures are credited only to the Non-resident Special Rupee (NRSR) account of the investor.

[(4) The borrowing by way of issue of preference shares on or after 30th day of April, 2007 other than those which are fully and mandatorily convertible into equity within a specified time and issue of convertible debentures on or after 7th day of June, 2007, other than those which are fully and mandatorily convertible into equity within a specified time, to a person resident outside India, shall be considered as debt and shall accordingly conform to regulation 6 of the Foreign Exchange Management (Borrowing or Lending in Foreign Exchange) Regulations, 2000 (Notification No. FEMA. 3/2000-RB, dated 3rd May, 2000) including the limits to such borrowings as specified in the said regulations.]

6. Restriction on use of borrowed funds .-No person resident in India who has borrowed in rupees from a person resident outside India,-

(1) shall use such borrowed funds for any purpose except in his own business other than-

(i) the business of chit fund, or

(ii) as Nidhi Company, or

(iii) agricultural or plantation activities or real estate business; or construction of farm houses, or

(iv) trading in Transferable Development Rights (TDRs).

(2) shall use such borrowed funds for any investment, whether by way of capital or otherwise, in any company or partnership firm or proprietorship concern or any entity, whether incorporated or not, or for relending.

[Provided that the Reserve Bank may permit such resident entities/companies to use such borrowed funds:

(a) for on lending / re-lending to the infrastructure sector; or

(b) for keeping in fixed deposits with banks in India pending utilization by them for permissible end-uses.]

Explanation .-For the purpose of sub-clause (iii) of clause (1), real estate business shall not include development of townships, construction of residential/commercial premises, roads or bridges.

7. [Loans in rupees to non-residents ].-Subject to the directions issued by the Reserve Bank from time to time in this regard, an authorised dealer in India may grant loan to a non-resident Indian,-

(A) against the security of shares or other securities held in the name of the borrower, or

(B) against the security of immovable property (other than agricultural or plantation property or farm house), held by him in accordance with the Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2000:

Provided that-

(a) the loan shall be utilised for meeting the borrower's personal requirements or for his own business purposes; and

(b) the loan shall not be utilised, either singly or in association with other person, for any of the activities in which investment by persons resident outside India is prohibited, namely:-

(i) the business of chit fund, or

(ii) Nidhi Company, or

(iii) agricultural or plantation activities or in real estate business, or construction of farm houses, or

(iv) trading in Transferable Development Rights (TDRs).

Explanation .-For the purpose of item (iii) of proviso, real estate business shall not include development of townships, construction of residential/ commercial premises, roads or bridges;

(c) the Reserve Bank's directives on advances against shares/securities/immovable property shall be duly complied with;

(d) the loan amount shall not be credited to Non-resident External (NRE)/ [* * *] Foreign Currency Non-resident (FCNR)/Non-resident Non-repatriable (NRNR) account of the borrower;

(e) the loan amount shall not be remitted outside India;

(f) repayment of loan shall be made from out of remittances from outside India through normal banking channels or by debit to the Non-resident Ordinary (NRO)/Non-resident Special Rupee (NRSR)/Non-resident Non-repatriable (NRNR)/Non-resident External (NRE)/Foreign Currency Non-resident (FCNR) account of the borrower or out of the sale proceeds of the shares or securities or immovable property against which such loan was granted,

[(C) for any purpose as per the loan policy laid down by the board of directors of the authorised dealer:

Provided that--

(a) the loan shall not be utilised either singly or in association with other person for:-

(i) the business of chit fund, or

(ii) Nidhi Company, or

(iii) agricultural or plantation activities or in real estate business or construction of farm houses, or

(iv) trading in Transferable Development Rights (TDRs), or

(v) investment in capital market including margin trading and derivatives;

(b) the Reserve Bank's directives on such advances shall be duly complied with;

(c) the loan amount shall not be credited to NRE/FCNR(B) accounts;

(d) the loan amount shall not be remitted outside India;

(e) repayment of loan shall be made from out of remittances from outside India through normal banking channels or by debit to NRE/FCNR(B)/NRO accounts.]

[(D) an authorised dealer in India may grant rupee loans to NRI employees of Indian companies for acquiring shares of the companies under the Employees Stock Option (ESOP) Scheme subject to the following conditions:--

(i) the ESOP Scheme should be as per the policy approved by the bank's Board;

(ii) the loan amount should not exceed 90% of the purchase price of the shares or Rupees 20 lakhs per NRI employee, whichever is lower;

(iii) the rate of interest and margin on such loans may be decided by the banks, subject to directives issued by the Reserve Bank from time to time;

(iv) the amount shall be paid directly to the company and should not be credited to the borrowers' non-resident accounts in India;

(v) the loan amount would have to be repaid by the borrower by way of inward remittances or by debit to his/her NRO/NRE/FCNR(B) account;

(vi) the loans will be included for reckoning capital market exposures and the bank will ensure compliance with prudential limits, prescribed by the Reserve Bank from time to time, for such exposure to capital market.]

[7A. A loan granted to a non-resident by an authorised, dealer, in accordance with Regulation 7 above, may be repaid by any relative of the borrower in India by crediting the borrower's loan account through the bank account of such relative.]

8. Providing housing loan in rupees to a non-resident .-An authorised dealer or a housing finance institution in India approved by the National Housing Bank may provide housing loan to a non-resident Indian or a person of Indian origin resident outside India, for acquisition of a residential accommodation in India, subject to the following conditions, namely:-

(a) the quantum of loans, margin money and the period of repayment shall be at par with those applicable to housing finance provided to a person resident in India;

(b) the loan amount shall not be credited to Non-resident External (NRE)/Foreign Currency Non-resident (FCNR)/Non-resident Non-repatriable (NRNR) account of the borrower;

(c) the loan shall be fully secured by equitable mortgage of the property proposed to be acquired, and if necessary, also by lien on the borrower's other assets in India;

(d) the instalment of loan, interest and other charges, if any, shall be paid by the borrower by remittances from outside India through normal banking channels or out of funds in his Non-resident External (NRE)/Foreign Currency Non-resident (FCNR)/Non-resident Non-repatriable (NRNR)/Non-resident Ordinary (NRO)/Non-resident Special Rupee (NRSR) account in India, or out of rental income derived from renting out the property acquired by utilisation of the loan [or by any relative of the borrower in India by crediting the borrower's loan account through the bank account of such relative.

Explanation .-The word "relative" means "relative" as defined in section 6 of the Companies Act, 1956;]

(e) the rate of interest on the loan shall conform to the directives issued by the Reserve Bank or, as the case may be, by the National Housing Bank.

[8-A. Rupee loans to NRI/PIO employees of Indian body corporate .-A body corporate registered or incorporated in India may grant rupee loan to its employees who is a Non-resident Indian or a Person of Indian Origin, subject to the following conditions, namely:--

(i) the loan shall be granted only for personal purposes including purchase of housing property in India;

(ii) the loan shall be granted in accordance with the Lender's Staff Welfare Scheme/Staff Housing Loan Scheme and other terms and conditions applicable to its staff resident in India;

(iii) the lender shall ensure that the loan amount is not used for the purposes specified in sub-clauses (i) to (iv) of clause (1) and in clause (2) of regulation 6;

(iv) the lender shall credit the loan amount to the borrower's NRO Account in India or shall ensure credit to such Account by specific indication on the payment instrument;

(v) it shall be a term of the loan agreement that the repayment of loan shall be made by way of remittance from outside India or from NRE/NRO/FCNR Account of the borrower; and the lender shall not accept repayment made from any other source.]

[8B. Rupee loans to non-resident Indian by Resident - A resident individual may grant loan to a NRI relative by way of crossed cheque/electronic transfer:

Provided that:

(i) the loan is free of interest and the minimum maturity of the loan is one year;

(ii) the loan amount should be within the overall limit under the Liberalised Remittance Scheme per financial year available for a resident individual. It would be the responsibility of the lender to ensure that the amount of loan is within the limits prescribed under Liberalised Remittance Scheme during the financial year;

(iii) the loan shall be utilised for meeting the borrower's personal requirements or for his own business purposes in India;

(iv) the loan shall not be utilised, either singly or in association with other person, for any of the activities in which investment by persons resident outside India is prohibited, namely;

(a) the business of chit fund, or

(b) Nidhi Company, or

(c) agricultural or plantation activities or in real estate business, or construction of farm houses, or

(d) trading in Transferable Development Rights (TDRs).

Explanation: For the purpose of item (c) above, real estate business shall not include development of townships, construction of residential/commercial premises, roads or bridges.

(v) The loan amount should be credited to the NRO a/c of the NRI/PIO. Credit of such loan amount may be treated as an eligible credit to NRO a/c;

(vi) the loan amount shall not be remitted outside India; and

(vii) repayment of loan shall be made by way of inward remittances through normal banking channels or by debit lo the Non-resident Ordinary (NRO)/Non-resident External (NRE)/Foreign Currency Non-resident (FCNR) account of the borrower or out of the sale proceeds of the shares or securities or immovable property against which such loan was granted.]

9. Continuance of rupee loan/overdraft to resident who becomes a person resident outside India .-An authorised dealer or, as the case may be, an authorised bank, may allow continuance of loan/overdraft granted to a person resident in India who subsequently becomes a person resident outside India, subject to the following terms and conditions:-

(a) the authorised dealer or the authorised bank is satisfied, according to his/its commercial judgment, about the reasons to continue the loan or overdraft;

(b) the period of loan or overdraft shall not exceed the period originally fixed at the time of granting the loan or overdraft;

(c) so long as the borrower continues to remain a person resident outside India, the repayment shall be made either by inward remittance from outside India through normal banking channels or from the funds held in Non-resident External (NRE)/Foreign Currency Non-resident (FCNR)/Non-resident Non-repatriable (NRNR)/Non-resident Ordinary (NRO)/Non-resident Special Rupee (NRSR) account of the borrower.

10. Continuance of rupee loan in the event of change in the residential status of the lender .-In case a rupee loan was granted by a person resident in India to another person resident in India and the lender subsequently becomes a non-resident, the repayment of the loan by the resident borrower should be made by credit to the Non-resident Ordinary (NRO) or Non-resident Special Rupee (NRSR) account of the lender maintained with a bank in India, at the option of the lender.

11. Overdraft in rupee account maintained with authorised dealer in India by a bank outside India .-An authorised dealer may permit a temporary overdraft, for value not exceeding rupees five hundred lakhs, in rupee accounts maintained with him by his overseas branch or correspondent or Head Office outside India, subject to such terms and conditions as the Reserve Bank may direct from time to time.

Explanation .-For the purpose of calculating the ceiling of rupees five hundred lakhs under this regulation, the aggregate amount of overdrafts permitted by the authorised dealer to all his branches, correspondents and Head Office outside India outstanding in the books of all his branches in India, shall be taken into account.

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