NRI loan interest rate - Purpose is the king

stock photo Summary: NRI loan interest rate depends heavily on the purpose of borrowing. When the purpose is to invest in share or commercial immovable property market, the payable interest rate is higher. Any loan borrowed by the NRI to be invested at an employment generating project is charged a lower rate. The Reserve Bank of India has recently banned public and private sector banks from lending more than Rs 20 Lakh against the deposits of NRIs. This ban is imposed by the apex bank on suspicion that a large part of such loans is being diverted for speculation in shares and immovable property market. These cautious steps from the apex banking body are aimed at ensuring that bank credit is streamlined towards productive sectors other than the retail sector. It will definitely squeeze the extra investment flow particularly in commercial real estate and capital markets. The hike in standard assets provisioning(SAP) will lead to an increase in retail lending rates. read more