• Zonal Classification of Bengaluru
• Non-Resident Indian
• Housing Finance

Zonal Classification of Bengaluru

North Bengaluru
Jayamahal, Richards Town, Ganganagar, RMV II Stage, R.T. Nagar, Sultanpalya, HRBR Layout, OMBR Layout, Hebbal, Sanjaynagar, Jalahalli, Vidyaranyapuram, Yelahanka, Jakkur, Coffee Board Layout, Kalyannagar, HBR Layout .

West Bengaluru
Sadashivnagar, Yeshwantpur, Peenya Industrial Area, Dasarahalli, Tumkur Road, Nandini Layout, West of Chord Road, Rajajinagar, Basaveshwaranagar, Srirampuram, Rajarajeswari Nagar, Gnanabharathi, Kengeri, Vijaynagar, R.P.C. Layout, Chandra Layout.

South Bengaluru
Lalbagh road, Gandhi bazaar, Shankarpuram, Chamrajpet, Basvanagudi, Binnypet, Banashankari, Uttarahalli, Kumarswamy Layout, Kanakapura Road, Katriguppe, Wilson Garden, Jayanagar, BTM Layout, J.P. Nagar, Bannerghatta Road, Madiwala, Hosur Road, Koramangala.

East Bengaluru
Ulsoor, Cooke Town, Lingarajpuram, Domlur, HAL, Defense Colony, Kodihalli, C.V. Raman Nagar, Banaswadi, Kammanahalli, Maruthi Seva Nagar, Cox Town, Ramamurthinagar, L.B. Shastrinagar, Maratahalli, Indiranagar, Jeevan Bhima Nagar, Mahadevanagar, ITI Colony, Dr. Ambedkar Nagar, Varthur Road, Old Madras Road, Whitefield Road, Hoskote,Whitefield, ITPL, Sarjapur, Electronic City, Bellandur, Siddapura, Saibaba Ashram, Kadugodi.

Central Business District
Bengaluru Palace, Benson Town, Cleveland Town, Shivajinagar, Vasanth Nagar, Nandidurga Extension, Bengaluru Race Course, Kumara Park, Bengaluru Golf Club, Vidhana Soudha, Palace Road, High Court, Cubbon Park, Richmond Town, Shanthinagar, Commercial Street, Victoria Layout, Munireddy palya.

FAQs: NRIs or PIOs

1. Who is an NRI?
2. Who is a PIO (Person of Indian Origin)?
3. What kinds of bank accounts can NRIs maintain?
4. Do Foreign Exchange Management Act (FEMA) rules and policies permit NRIs and PIOs to acquire
immovable property in India?
5. PIO residents are permitted:-
6. What are the benefits offered to NRIs/PIOs/Overseas Commercial Bodies under the Liberalized
Exchange Policy in the context of immovable property?
7. Can the sale proceeds of immovable property in India be repatriated?
8. Can the NRIs avail of housing loans using immovable property in India as security?
9. What security must NRIs provide?
10. Can NRIs give the power of attorney to a person of their choice, in India, in order to complete loan
formalities on their behalf?
11. Can the house acquired by NRI be let out?

1. Who is an NRI?
Under the Foreign Exchange Management Act, 1999,

(a) Non-Resident Indian is: a. An Indian citizen who spent less than 182 days during the preceding financial year in India OR
(b) An Indian citizen who is either employed abroad, undertakes a business or other vocational activity overseas, or for other reasons, is unable to indicate with certainty the length of his/her stay abroad. OR
(c) A government employee either deputed abroad on assignment or posted to Indian governmental offices located overseas, such as the Indian Diplomatic Missions. OR
(d) An Indian citizen working abroad on assignment with foreign governmental agencies such as the UN, the WHO, the IMF, the World Bank etc.,

2. Who is a PIO?
As per FEM Regulations, 2000 (Acquisition & Transfer of Immovable Property in India), a Person of Indian Origin is a citizen of any country (other than Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal or Bhutan), provided:
(a) he/she has held an Indian passport at any point in time; or
(b) he/she or either of his/her parents or grand-parents was a citizen of India by virtue of the Indian Constitution or the Citizenship Act of 1955

3. What kinds of bank accounts can NRIs maintain?
A. ORDINARY NON-RESIDENT RUPEE ACCOUNTS (NRO Accounts)
Who and How: The existing bank account of an Indian National going abroad is automatically assigned to be an Ordinary Non-Resident Account (NRO). An NRI can also open an NRO account by remitting funds from abroad or by transferring funds from an existing NRO account into an existing NRO account. Such accounts can also be opened by Overseas Corporate Bodies (OCBs). NRO accounts can either be opened by individual NRIs, or jointly by non-residents with their close relatives, resident in India. From then on, operations by the resident account holders can be made freely.

Type: Current, savings and term deposit accounts.

Transactions permitted: All types of transactions involving deposits and withdrawals to and from NRO accounts are usually permitted.

Repatriability: As funds in these accounts are non-repatriable, they cannot be remitted abroad to the account holders or transferred to their NRE accounts without the Reserve Bank’s prior permission. Nevertheless, the funds can be freely withdrawn from local disbursement without the approval of the Reserve Bank of India (RBI).

Tax: The interest of deposits in NRI accounts and their outstanding balances are not exempt from Indian income tax.

B. EXTERNAL NON-RESIDENT RUPEE ACCOUNTS (NRE Accounts)
Who and How: Non Resident Indians (NRIs) as well as Overseas Corporate Bodies (OCBs) are permitted to open NRE accounts. In order to open an NRE account, funds need to be remitted to India through the:
(i) proceeds of foreign exchange remittances from abroad through approved banking channels, or
(ii) proceeds of foreign currency and traveler’s cheques bought into India by the non-resident while on a temporary visit to India,or (iii) transfer of funds from an existing External Non- Resident FCNR account of the same person.

Type: All types of account i.e. current, savings and term deposits can be opened under the NRE Accounts Scheme. NRE accounts can be opened either by individuals or jointly. In the case of joint NRE Accounts however, all the account holders must be of Indian nationality or origin.

Repatriability: The entire credit balance of the account can be repatriated outside India at any given time without prior reference to the Reserve Bank. At the time of repatriation, the amount to be sent is converted into the designated foreign currency at the prevailing market exchange rate. In essence, NRE accounts offer all the facilities offered by NRO accounts in addition to which NRE account holders are allowed repatriation without informing the Reserve Bank.

C. FOREIGN CURRENCY (NON-RESIDENT INDIANS) FCNR (B) ACCOUNT
Who and How: With the exception of persons of Indian origin from Bangladesh and Pakistan, all Non Resident Indians and Overseas Commercial Bodies are eligible to open FCNR accounts. FCNR (B) accounts are permitted in the following currencies: Pound Sterling (GBP) | Deutsche Mark (DM) | US Dollar (USD) | Japanese Yen (JPY) | Euro (EUR) | or other currencies that fit RBI guidelines. The rates of interest on the FCNR (B) account vary by currency. Type: Only term deposits, ranging over a period of 6 months to 3 years, can be maintained in FCNR (B) accounts. Current and savings accounts are not available under this scheme.

4. Do Foreign Exchange Management Act (FEMA) rules and policies permit NRIs and PIOs to acquire immovable property in India?
Under the Foreign Exchange Management Act of India, Non Resident Indians are allowed to acquire immovable property in India, with the exceptions of agricultural/plantation properties and farm houses.

5. PIO (Persons of Indian Origin) residents are permitted:-
to acquire any immovable property other than agricultural land/farm house/plantation property in India by purchase using:

(i) funds received in India through remittances from abroad, or
(ii) funds held in the investor’s non-resident accounts

(a) to be gifted any immovable property in India other than agricultural land/ farmhouses /plantation
property from a resident, NRI or PIO

(b) to inherit any immovable property in India from a resident or non-resident who had acquired the property in accordance with the law of foreign exchange valid at the time of acquisition. Any non-resident person who has established a branch, office or other place of business (excluding a liaison office) in India in accordance with FEM Regulations, 2000, may acquire an immovable property so long as he/she provides a declaration in Form IPI to the Reserve Bank of India within 90 days of the date of acquisition.

6. What are the benefits offered to NRIs/PIOs/Overseas Commercial Bodies under the Liberalized Exchange Policy in the context of immovable property?
(i) Non-resident Indians are permitted to transfer any immovable property in India to a resident person, and any immovable property other than agricultural or plantation property or farmhouses, to a Non-Resident Indian or Person of Indian Origin.
(ii) Persons of Indian Origin are permitted to transfer any immovable property in India other than agricultural land / farm houses
/plantation property by way of sale to a resident person; any agricultural land / farm house / plantation property in India, by way of gift or sale to a resident person who is a citizen of India; and any residential or commercial property in India by way of gift to a resident person or NRI or PIO.
(iii) Any Non-Resident person who has acquired any immovable property in India for establishing an office or other place of business (excluding a liaison office), is permitted to transfer such property by way of mortgage to an authorised dealer as security.

7. Can the sale proceeds of immovable property in India be repatriated?
The sale proceeds of immovable property in India can be repatriated if the following conditions are fulfilled :

(a) The immovable property was acquired by the seller in accordance with the law of foreign exchange in force at the time of acquisition.

(b) The amount to be repatriated does not exceed the amount paid for the acquisition of the immovable property in foreign exchange received either (i) through normal banking channels, or (ii) from funds held in the seller’s FCNR A/c, or (iii) the foreign exchange equivalent, as on the date of payment, when the amount was paid of out the seller’s External Non Resident Rupee Account (NRE A/c).

(c) In the case of residential property, the repatriation of sales proceeds is restricted to two properties.
(d) If a non-resident person acquired an immovable property in India when he was a resident or inherited it from a resident, the repatriation of sales proceeds of the property will only be allowed once the Reserve Bank of India has granted permission. Similar restrictions shall apply for the successors of the above mentioned.

(e) No permission is required for the renting, transfer or gifting of property so long as there is no repatriation of proceeds. (The condition for the non-repatriation of sales proceeds for a period of three years has now been withdrawn by the Reserve Bank of India as per the RBI circular of 1.11.2002)

8. Can the Non Resident Indian avail of housing loans using immovable property in India as security?
Yes. Authorised dealers and financial housing institutions in India, approved by National Housing Banks, may grant housing loans to Non Resident Indians and Persons of Indian Origin for the acquisition of immovable property in India subject to the following conditions:

(a)The size of the loan, interest rate, fees and other charges as well as the repayment period must be at par with those applicable to housing loans being granted to Indian residents. (b) The loans must be fully secured by creating an equitable mortgage of the property being acquired, and if necessary, additional liens may need to be placed upon other assets belonging to the borrower in India. (c) The loan amount must not be credited to the NRE, FCNR or NRNR (Non Resident Non-Repatriable Term Deposit Account) accounts of the non-resident borrower.

The borrower may repay the loan in installments comprising of principal & interest payments and other charges through remittances from abroad via normal banking channels, or from funds held in his/her NRE/FCNR/NRO/ NRNR accounts in India

9. What security must Non Resident Indians provide?
Typically, the security for the loan is a first mortgage of the property being financed, usually by way of deposit of title deeds. Other such collateral security may also be necessary.

In addition, interim security may also be required if the property is under construction. Collateral or interim security could be in the form of the assignment of life insurance policies (where the borrower surrenders value at least equal to the loan amount), the pledge of shares and/ or other investments

10. Can Non Resident Indians give the power of attorney to a person of their choice, in India, in order to complete loan formalities on their behalf?
Yes; it is usually considered desirable to appoint a power of attorney in India to represent you in dealings here. The power of attorney should be exercised as per drafts provided by the Housing Finance Company and can be given to a person of your choice in India

11. Can the house acquired by NRI be let out?
The RBI has granted permission to Non Resident Indians and Persons of Indian Origin to let out their residential properties in India. However, there are restrictions on the repatriation of the rental income earned from such property; i.e. the rental income is non-repatriable. Thus funds (rental income) can be credited to their Ordinary Non-Residential (NRO A/c) or Residential Account in India.

Housing Finance
1. How does a Housing Finance Corporation (HFC) decide on home loan eligibility?
2. What are the different interest rate options available to a home loan prospect?
3. Can a HFC assist me in selecting accommodation of my choice?
4. What are the documents that one needs to be prepared with for a loan to be approved?
5. What is an EMI – Equated monthly installment?
6. What is Pre-EMI?
7. What is Tranche Based EMI payment?
8. What is an Adjustable Rate Home Loan (ARHL)?
9. What is RPLR (Retail Prime Lending Rate)?
10. Can one repay a home loan ahead of schedule?
11. Does one get a tax benefit on the home loan taken?
12. What security has to be provided which one avails a home loan?
13. What definite checks are to be taken by a person looking to purchase a property?
14. Will HFC’s finance persons of Indian origin holding foreign passports?
15. How is a home loan reassessed on change in status from Non-Resident Indian to Resident Indian?

About Housing Finance

1. How does Housing Finance Corporation (HFC) decide on home loan eligibility?
The customer’s repayment capacity is the deciding factor for the home loan eligibility. Repayment ability is based on factors such as income, age, qualifications, number of dependants, spouse's income, assets, liabilities, stability and continuity of occupation and savings history. An important factor is also the comfort factor in repaying the loan over a long duration of approx 15 to 20 years.

2. What are the different interest rate options available to a home loan prospect?

• Adjustable Rate Home Loans
• Fixed Rate

3. Can a HFC assist me in selecting accommodation of my choice?
Prominent HFC’s like HDFC, ICICI can assist you in finding the property of your choice.

4. What are the documents that one needs to be prepared with for a loan to be approved?
Common documents required for the following categories – Salaried customers | Self employed professionals | Self employed businessmen.

• Application form with photographs
• Identity and residence proof specific documents that would be required.

5. What is an EMI – Equated monthly installment?

Repayment of a loan is done in Equated Monthly Installments (EMIs) - this amount is paid every month to the HFC from which the loan is taken.

EMI would comprise an amount towards repayment of the principal taken and the calculated interest component. Payment of EMI would start from the month after the month in which the full disbursement of home loan is done.

6. What is Pre-EMI?
Pending final disbursement of the home loan, one has to pay interest on the portion of the loan disbursed until that point in time. This interest is called Pre-EMI. This is payable every month from the date of each disbursement till the date of commencement of EMI.

7. What is Tranche Based EMI payment?
To enable customers to save on the Pre-EMI interest on a home loan taken, certain banks provide a Tranche Based EMI payment. For under construction properties customers can choose the installments they wish to pay, till the time the property is ready for possession. Anything paid over and above the interest by the customer goes towards Principal repayment.Customers benefits by commencing payment of the EMI and hence close the home loan/ mortgage early.

8. What is an Adjustable Rate Home Loan (ARHL)?
Adjustable Rate Home Loans (or floating rate loans) are the ones in which the interest rates change throughout the entire tenure of the home loan. In case of ARHL, interest rates are linked to the HFC's Retail Prime Lending Rate (RPLR). The rate on the home loan is revised typically every quarter from the date of first disbursement. In the case of change to the RPLR – there is either an increase or decrease in the interest rate on the home loan by certain basis points which are decided by the HFC’s / lending companies. However, the EMI on the home loan disbursed will not change. If the interest rate increases, the interest component in an EMI will increase and the principal component will reduce resulting in an extension of term of the loan, and vice versa when the interest rate decreases.

9. What is RPLR (Retail Prime Lending Rate)?
Housing finance companies benchmark their Floating/ Adjustable rate home loans against a set retail prime lending rate (RPLR) which, in turn, is dependent on the HFC’s cost of borrowings. What this means is that whenever there is a change in the company’s cost of funds (be it an upward or downward revision), RPLR is adjusted accordingly.

10. Can one repay a home loan ahead of schedule?
Yes, one can pay back a home loan taken ahead of schedule. This is normally done by paying back the home loan in lump sum amounts which would in turn offset the principal taken and reduce the EMI to be paid back.

For example – HDFC enables customers repay home loans ahead of schedule by payment of lump sum amounts or opt to choose the accelerated repayment scheme. There are NO charges for choosing an accelerated repayment scheme and for lump sum payments under Adjustable Rate Home Loan with HDFC.

Adjustable Rate Home Loan [ARHL]
If a prepayment is made within 3 years of the first disbursement, under Adjustable Rate Home Loan (ARHL) option early redemption charges of 2% of the amount being prepaid is payable if the amount being repaid is more than 25% of the opening balance.

Fixed Rate Home Loan [FRHL]
Redemption charges of 2% of the amount being prepaid is payable if the amount being repaid is more than 25% of the opening balance. In case of commercial refinance under both the FRHL and ARHL an early redemption charge of 2% is payable. You may be required to submit copies of your Bank Statements or any other documents that HDFC deems necessary to verify the source of prepayment.

11. Does one get a tax benefit on the home loan taken?
Resident Indians are eligible for certain tax benefits on both principal and interest components of a home loan under the Income Tax Act, 1961. Interest repayment of Rs. 1,50,000 p.a. can get you a tax saving upto about Rs. 50,490 p.a. One can get added tax benefits under Sec 80 C on repayment of principal amount up to Rs. 100,000 p.a. that can further reduce your tax liability by about Rs. 33,660 p.a.

12. What security has to be provided which one avails a home loan?
A first mortgage of the property to be financed will be a mandatory security requirement from the HFC; this is normally done by way of deposit of title deeds and/or such other collateral security pertaining to the same that may be necessary. Interim security may be additionally required, if the property is under construction. Collateral or interim security could be assignment life insurance policies, the surrender value of which is at least equal to the loan amount, guarantees from sound and solvent guarantors, pledge of shares and such other investments that are acceptable to HFC’s.

13. What definite checks are to be taken by a person looking to purchase a property?
Do ensure that the title to the property is clear, marketable and free from encumbrance. To elaborate, there should not be any existing mortgage, loan or litigation, which is likely to affect the title to the property adversely.

14. Will HFC’s finance persons of Indian origin holding foreign passports?
As per current guidelines of the Reserve Bank of India persons of Indian origin holding foreign passports are eligible for loans with HFC’s.

15. How is a home loan reassessed on change in status from Non-Resident Indian to Resident Indian?
The repayment capacity of the applicant(s) based on Resident status is reassessed by the HFC and a revised repayment schedule worked out. The new rate of interest will be as per the currently applicable rate of Resident Indian loans (for that specific loan product). This revised rate of interest would be applicable on the outstanding balance being converted. Documentation referring to change in status of the home loan is normally shared with the customer.