Click here to see what 'close relative' means.
However, there is a cap of $250,000 or its equivalent up to which you can take a loan from your close relative. In addition, there are some conditions which you need to fulfill, before you can borrow the money you need from your close NRI relative.
The conditions required to be fulfilled are:
- Minimum maturity period of the loan must be 1 year.
- The loan must be interest free.
- The loan amount is taken by inward remittance in free foreign exchange via normal banking channels or by debit to either the Non-Resident (External) Rupee Account (NRE) or Foreign Currency Non-Resident (Bank) Account i.e. FCNR(B).
What is a NRE or FCNRB Account?
A Non-Resident (External) Rupee Account (NRE) can be opened only by a Non-Resident Indian (NRI) and not through the holder of the power of attorney. The account is available in the forms of savings, current, recurring or fixed deposits. The account will be held in Indian Rupees and the balances as well as the interest earned will be tax exempted.
A Foreign Currency Non-Resident (Bank) Account or the FCNR(B) can be opened and maintained by Indians who reside abroad. They are available only in the form of term deposit of 1 to 5 years. The account can be held in any convertible currency.
So, if you are in dire need of some lump sum amount of money then you can count on your close relative staying outside India for providing you with the loan. But before, doing that decide on the amount of money that you will take loan. Also, remember that your loan amount should not exceed USD 250,000.