RUPEE LOAN AGAINST NRE DEPOSIT

During a recent development , RBI have removed the cap of INR 100 Lacs for Loan against NRE Deposit , there may be several reasons for RBI’s this step but NRI’s are always demanding this as this type of Loan is gaining popularity day by day.

Features and Benefits of this Loan is as under

i)                    As all of us aware that NRE Fixed Deposit should be prepared for a minimum period of one year and if you require funds before one year of then you have to forgo the interest portion , now at this time this loan will help you to ensure your liquidity without taking premature payment of your fixed deposits.

ii)                  Loans available to self as well as third party individuals , so if you wantg to lend some money to any of your relative and at the same time you want separate accounting  then you can use it and tell your relative to repay this loan , by doing this your relative will get money and you need not to break your Tax Free NRE FD’s

iii)                 Loans available up to 90% of the principal amount of the deposits without any upper ceiling.

iv)                You can take overdraft facility so that whenever you require, you can withdraw money. you can also take it as Demand loan in which the entire loan amount will be credited to your NRO account

v)                Repayment to be made either by adjustment of the Fixed Deposit or by fresh remittances from outside India through normal banking channels. Loan can also be repaid out of the funds in the NRO account of the borrower. In case of loans to third parties, the same can be repaid out of the local rupee account of the borrower.

vi)              Interest will be charged at 0.50% above the rate of Fixed deposit against which you are taking loan and this interest will be charged at daily reducing balance

So go ahead and utilise this facility

For other details / queries, drop a mail at prashant.singh@sbi.co.in