Module: | FCNR(B) & Loan Regulations
Q16: Sagar holds a diverse portfolio including NRE Fixed Deposits, NRO Fixed Deposits, and an FCNR(B) deposit. He requires a loan of ₹50 lakhs to purchase a flat in Mumbai, and approaches his bank to avail a loan against these deposits. Which of the following statements, correctly describe the loan regulations across these account types?
1. He can avail a loan in Indian Rupees, against his NRE, NRO, or FCNR(B) deposits.
2. If he takes a loan against his FCNR(B) deposit, he has the option to take it in foreign currency as well.
3. If he takes a loan against his NRO deposit, the loan proceeds must be utilized within India, and cannot be repatriated abroad.
4. Loans against NRE deposits are prohibited, for real estate investment purposes.
2. If he takes a loan against his FCNR(B) deposit, he has the option to take it in foreign currency as well.
3. If he takes a loan against his NRO deposit, the loan proceeds must be utilized within India, and cannot be repatriated abroad.
4. Loans against NRE deposits are prohibited, for real estate investment purposes.
✅ Correct Answer: A
INR loans are permitted against NRE, NRO, and FCNR(B). Foreign currency loans are allowed against FCNR(B). NRO loan proceeds are non-repatriable.
Housing loans are permitted; speculative real estate is banned.
Housing loans are permitted; speculative real estate is banned.