Such loans/overdrafts can be granted uupto any limit either for
non-investment in India on non-repatriation basis in specified areas.
Such loans/overdrafts are granted to the extent of 75% of the deposit
amount and generally at a rate of 2% over the interest rate payable on the
fixed deposit against which loan is granted. However, if the loan/overdraft is
repaid from local rupee resources, interest would be chargeable at the
normal commercial bank rate.

The repayment of loan and the payment of interest thereon can be made
either by way of fresh remittances from abroad or out of the maturity
proceeds of the borrower's NRE/FCNR deposits or even out of local rupee
resources held in the NRE account of the borrower.

The facility of granting loans and overdrafts against security of fixeddeposits of the NRG in his NRE/FCNR accounts can also be extended to
residents of India, if the NRG depositor agrees to pledge his fixed deposits
to enable the resident individual/firm/company to obtain the facility.
The rate of interest in case of such credit facilities to the residents would
be the normal commercial bank rate.

The above referred facilities of loans/overdrafts can also be availed of
against the security of NRG Bonds or the India Development Bonds issued
by the State Bank of India.

[ BACK ]