NRI Guide

Reserve Bank of India (RBI) permits NRIs and persons of Indian Origin (PIO) to buy residential and commercial property in India through a home loan. It can range between a few lakhs to a few crores. Most banks fund only 75-85% of the property’s total cost even for NRIs

NRIs can also apply for home loan, based on repayment capacity and the cost of the property. To determine repayment capacity, banks take into account factors such as Age, Income, Qualifications, Number of dependents, Assets, Liabilities, Stability / continuity of your employment / business, Income of co-applicant/s. For some banks, a co-applicant is mandatory if one wants to apply to India Home Loan.

Who is an NRI?
An NRI is an Indian citizen who stays outside India:

  1. for purposes of carrying out employment or any business or vocation;
  2. under circumstances indicating an intention to stay outside India for an uncertain duration;
  3. any Indian citizen deputed outside India for a temporary period in connection with employment.

Who is a PIO?
A citizen of a foreign country (other than a citizen of Bangladesh or Pakistan) is a PIO if

  1. he/ she at any time held an Indian passport; OR
  2. he/ she or either of his/ her parents or any of his/ her grandparents was a citizen of India; OR
  3. spouse (not being a citizen of Bangladesh or Pakistan) of an Indian citizen or (a) or (b) above.

An NRI needs to give the address in India where the immediate family lives, and where he/she may want to receive correspondence on India Home Loans. This is a mandatory requirement. Banks need employer or business details for credit verification purposes. Even though this is not a mandatory requirement, home loan in India will be sanctioned faster. Only an NRI can guarantee an India Home Loan taken by another NRI. It’s mandatory to have either a co-applicant or an NRI guarantor. Some banks also insist to provide resident Indian references while applying for Indian Home Loans. For NRI professionals and self employed applicants, the maximum tenure is 20 years.

Some banks require that a Power of Attorney is executed. A power of attorney is a resident Indian appointed to act on behalf of all the applicants through an execution of the General Power of Attorney (GPA) deed. The applicant and co-applicant execute the GPA in favor of the person concerned. If the co-applicant is a resident Indian, he / she can also be the POA through the execution of the GPA by the applicant.

NRIs are required to present the following documents to avail the home loan:

Documents normally required are copies of the passport, valid visa and work permit, contract of employment, work experience certificate, salary certificate and statements of NRENRO accounts. For those residing in the Middle East, copy of employment card is also required. Salary certificate should be attested from the embassy if the salary is not getting credited to a bank.

Salaried NRI Applicants

  1. Copy of valid passport showing VISA stamps
  2. Copy of valid visa / work permit / equivalent document supporting the NRI status of the proposed account holder
  3. Latest contract copy evidencing Salary / Salary Certificate / Wage Slips
  4. Overseas Bank A/C for the last 3 months showing salary credits

Self Employed NRI Applicants

  1. Trade license or equivalent document
  2. 6 months overseas bank account statement and NRE/ NRO account
  3. Computation of income, P&L account and Balance Sheet for last 3 years certified by the C.A. / CPA or any other relevant authority as the case may be (or equivalent company accounts)
  4. Passport copy with valid visa stamp
  5. Brief profile of the applicant and business

NRI Personal Guarantor documents (In case one has opted for an NRI Personal Guarantor on home loan)

  1. Passport & VISA copies of the NRI Guarantor
  2. Current overseas address verification proof of the NRI Guarantor. (Driving license or bank statement showing overseas address or latest insurance premium receipt or utility bill)
  3. Current Income documents of guarantor.

Disclaimer : Above views and details are informative in nature, only for reference of user. The procedures, eligibility and documentation may defer from bank to bank.