Module: | MODULE A: INTERNATIONAL BANKING
Q56: Consider the following statements regarding a resident individual lending money to a Non-Resident Indian (NRI) relative:
1.
The loan must be free of interest.
2.
The minimum maturity period of the loan must be one year.
3.
The amount of the loan is outside the purview of the USD 250,000 LRS limit.
Which of the statements given above is or are correct?
✅ Correct Answer: Option A
🎯 Quick Answer:
Statements 1 and 2 are correct. Statement 3 is incorrect because the loan amount is included within the LRS limit.
Concept Definition: Rupee Loans to NRI Relatives.Residents can lend money to close relatives (as defined in the Companies Act, 2013) abroad.Structural Breakdown: Condition 1 (Interest): The loan must be Interest-Free.Commercial lending is not allowed under this facility.Condition 2 (Tenure): The minimum maturity period is One Year.This prevents short-term speculative money flows.Condition 3 (Limit): The loan amount is subsumed under the sender's LRS limit of USD 250,000.It is not an additional allowance. Statements 1 and 2 are correct. Statement 3 is incorrect because the loan amount is included within the LRS limit.