Deposits from nris

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Jayesh (Querist)
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02 October 2011 Can a Pvt Ltd Co accept a loan / deposit from an NRI Director or NRI shareholder?

RBI had proscribed accepting deposits from NRIs *unless* the funds were from an NRO acount. Is this restriction still applicable? Does this apply to loans as well?

Vishal D Shah

Vishal D Shah (Expert)
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03 October 2011 Yes. Pvt co can accept deposit from NRI Director.

Yes. Funds needs to come from NRO account only.

Regards,
cavishalshah @ gmail.com

CA. Anuj Gupta

CA. Anuj Gupta (Expert)
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03 October 2011 Few observations of Vishal Shah's post:-

Pvt.Company can accept deposits from NRI Director provided he is shareholder in the Company .

Further:-

1.The maturity period of deposit shall not exceed 3 years.

2.The rate of interest payable on deposits shall not exceed the ceiling rate prescribed from time to time under the Companies (Acceptance of Deposit) Rules, 1975

3.The amount of deposit shall be received by debit to NRO account only, provided that the amount of the deposit shall not represent inward remittances or transfer of funds from NRE/FCNR(B) accounts into the NRO account."

4.The company accepting the deposit shall not utilise the amount of deposits for relending (not applicable to a Non-Banking Finance Company) or for undertaking agricultural/plantation activities or real estate business or for investing in any other concern or firm or company engaged in or proposing to engage in agricultural/plantation activities or real estate business.

5.The amount of deposits accepted shall not be allowed to be repatriated outside India.

Anuj
+91-9810106211
femaquery@gmail.com

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Vishal D Shah

Vishal D Shah (Expert)
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03 October 2011 Ofcourse that's what schedule speaks of fema 5. Anuj gave you whole consultancy jayesh !