RBI Allows Foreign Currency Loans Against FCNR(B) Deposits for Account Holders with Strict Guidelines.

The Reserve Bank of India has issued a circular allowing authorized dealers to grant foreign currency loans in India against FCNR(B) deposit accounts. This facility is extended to account holders only, with specific guidelines: loans must be against the holder's own deposits, not third-party deposits; the loan's maturity cannot exceed the deposit's maturity; and loans should not be used for investments in India. Repayment should be through fresh foreign exchange remittances or deposit adjustments. Banks must ensure adequate monitoring and obtain board approval for extending this facility, complying with existing regulations.

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