Repayment of Loans to NRE/NCNR(B) Account Extended by way of Inward
Remittance in Forex through Normal Banking Channels
[RBI
Circular No. 95 dated 21st March 2012]
Sub: Foreign
Exchange Management (Deposit) Regulations, 2000 - Credit to Non Resident
(External) Rupee Accounts
Attention of Authorised Dealer Category - I (AD
Category-I) banks is invited to Regulation 5(6) of Foreign Exchange Management
(Borrowing or Lending in Foreign Exchange) Regulations, 2000 notified vide Notification
No. FEMA 3/2000-RB dated May 3, 2000, as amended from time to time, in terms of
which, an individual resident in India may borrow a sum not exceeding USD
250,000/- or its equivalent from her / his close relatives outside India,
subject to the conditions mentioned therein.
2. The Reserve
Bank has received representations that the repayment of such loans may be
allowed to be credited to the Non Resident (External) Rupee (NRE) Accounts. On
review, it has been decided that AD Category-I banks may allow repayment of
such loans to NRE / Foreign Currency Non-Resident (Bank) [FCNR(B)] account of
the lender concerned subject to the condition that the loan to the resident
individual was extended by way of inward remittance in foreign exchange through
normal banking channels or by debit to the NRE / FCNR(B) account of the lender
and the lender is eligible to open NRE / FCNR(B) account within meaning of the
Foreign Exchange Management (Deposit) Regulations, 2000 notified vide Notification
No. FEMA 5/2000-RB dated May 3, 2000, as amended from time to time. Such credit
shall be treated as an eligible credit to the NRE/ FCNR(B)
account in terms of Para 3(j) of Schedule-1 read with Para 5 of Scheule-2 of
Notification No. FEMA 5/2000-RB, ibid.
3. Authorized
Dealer banks may please bring the contents of this circular to the notice of
their constituents concerned.
4. The directions
contained in this circular have been issued under Section 10(4) and 11(1) of
the Foreign Exchange Management Act, 1999 (42 of 1999) and are without
prejudice to permissions / approvals, if any, required under any other law.