A recent press report said that the Reserve Bank of India has allowed resident individuals to repay housing loans in rupee on behalf of their close relatives, who are non-resident Indians (NRIs) or People of Indian origin (PIO).
Reports said that the Reserve Bank of India has announced that it has been decided that where an authorized dealer (bank) in India has granted loan to a non-resident Indian, such loans may also be repaid by resident close relative of the NRI by crediting the borrower’s loan account through the bank account of such relative. The repayment facility is offered only for housing loans and not for any other loans.
In another circular, the central bank allowed resident individuals to pay for medical expenses of their non-resident close relatives, who are on visit to India.
The RBI has recently hiked base rates by 25 basic points, in order to control inflation. The hike in base rate has affected the home loan and other loan borrowers as the hike in base rates by the RBI has pushed banks to hike their lending rates.