“We have got remarks from market players. I would say that in the timetable, that will be later than the stock lending scheme and currency futures,” the stock market regulator’s chairman C. B. Bhave told an investment conference in Singapore via teleconference.
SEBI in December released draft guidelines on setting up REITs in India, which would pave the way for wider participation by retail investors in the country’s booming real estate sector.

Regulators are also mulling over the introduction of currency futures to help investors hedge foreign exchange risks, and a new system for the borrowing and lending of securities.

The purchase consideration for residential immovable property should be met either out of inward remittances in foreign exchange through normal banking channels or out of funds from NRE or FCNR accounts maintained with banks in India.

Foreign citizens of Indian origin needed to file a declaration in Form IPI 7 with the Central Office of Reserve Bank, Mumbai within 90 days from the date of purchase of immovable property, or final payment of purchase consideration. They will also need a certified copy of the document for the proof of transaction and a bank certificate regarding the consideration paid. Such property can be sold without the permission of Reserve Bank. If foreign citizen of Indian origin purchases the property, funds towards the purchase consideration should either be remitted to India or paid out of balances in NRE or FCNR accounts. Reserve Bank considers applications for repatriation of sale proceeds up to the consideration amount remitted in foreign exchange for the acquisition of the property for two such properties, purchased on or after 26^th May 1993. The balance amount of sale proceeds or sale proceeds in respect of properties purchased prior to 26th May 1993 will have to be credited to the ordinary non-resident rupee account of the owner of the property.

As far as the matter of repatriation is concerned, applications for repatriation of sale proceeds are considered provided the sale takes place after three years from the date of final purchase deed or from the date of payment of final installment of consideration amount, whichever is later. Applications for necessary permission for remittance of sale proceeds should be made in Form IPI 8 to the Central Office of Reserve Bank at Mumbai within 90 days of the sale of the property.

Reserve Bank has granted general permission to foreign citizens of Indian origin to attain or dispose of properties up to two houses by way of gift from a relative or to a relative, who may be an Indian citizen or a person of Indian origin whether resident in India or not, subject to compliance with applicable tax laws. Immovable property held in India can also be transferred by way of gift to registered charitable trusts or organizations in India. General permission has been granted by Reserve Bank to non-resident persons of Indian origin regarding this. Foreign citizens of Indian origin can acquire commercial properties in India. Under the general permission granted by the Reserve Bank, properties other than agricultural land, farm house, plantation property can be acquired by foreign citizens of Indian origin provided the purchase consideration is met either out of inward transfer of funds in foreign exchange through normal banking channels or out of funds from the purchasers’ NRE or FCNR accounts maintained with banks in India. A declaration is submitted to the Central Office of Reserve Bank in Form IPI 7 within a period of 90 days from the date of purchase of the property or final payment of purchase consideration.

NRI and PIO can avail of loan from an authorized dealer for purchasing flat or house in India for his own residential use against the security of funds held in his NRE Fixed Deposit account / FCNR (B) account. Such loans are subject to the terms and conditions as laid down in Schedules 1 and 2 to Notification No. FEMA 5/2000-RB dated May 3, 2000 as modified from time to time. However, banks cannot issue fresh loans or renew existing loans in excess of Rupees 20 lakh against NRE and FCNR (B) deposits either to the depositors or to third parties. Such loans can be repaid by way of inward remittance through normal banking channel or by debit to his NRE / FCNR (B) / NRO account or out of rental income from such property or by the borrower’s close relatives through their account in India by crediting the borrower’s loan account.

In case the amount has been received from inward remittance or debit to NRE/FCNR (B)/NRO account for purchasing the property or for repayment of the loan, the principal amount can be repatriated outside India. Repatriation outside India means the buying or drawing of foreign exchange from an authorized dealer in India and remitting it outside India through normal banking channels or crediting it to an account denominated in foreign currency or to an account in Indian currency maintained with an authorized dealer from which it can be converted in foreign currency. In case the property is acquired out of Rupee resources and/or the loan is repaid by close relatives in India, the amount can be credited to the NRO account of the NRI/PIO. The amount of capital gains arising out of sale of the property can also be credited to the NRO account. NRI or PIO is also allowed by the Authorized Dealers to repatriate an amount up to USD 1 million per financial year out of the balance in the NRO account.

NRI or PIO can avail of housing loan in rupees from an authorized dealer or housing finance institution in India approved by the National Housing Bank for purchase of residential accommodation or for the purpose of repairs, renewal or expansion of residential accommodation. Such loan can be repaid by way of inward remittance through normal banking channel or by debit to his NRE / FCNR (B) / NRO account or out of rental income from such property or by the borrower’s close relatives, as defined in section 6 of the Companies Act, 1956, through their account in India by crediting the borrower’s loan account.

NRI or PIO can also avail of housing loan in rupees from his employer in India. For terms and conditions, please refer to Regulation 8A of Notification No. FEMA 4/2000-RB dated May 3, 2000 and A.P. (DIR Series) Circular No.27 dated October 10, 2003. For more information, please refer to www.rbi.org.in.