🔒 Loan Against Securities (LAS) for NRIs & Overseas Investors
Summary: Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs) can leverage their Indian securities (shares, mutual funds, bonds) to raise rupee liquidity—without remitting back funds. Discover the key rules, documentation, repatriation norms, and best practices below! 😊
1. Who Qualifies? 🇮🇳
Under RBI’s PIS (Portfolio Investment Scheme), NRIs/OCIs with valid NRE/NRO accounts can pledge listed shares, mutual fund units, and bonds for LAS. No separate approval is needed beyond opening an NRE/NRO account with PIS permission. 1
2. Eligible Collateral & LTV Ratios 📊
For NRI LAS, banks typically allow up to 50% LTV on equity shares and 75% LTV on debt funds or bonds—mirroring domestic guidelines.2 Higher‐quality collateral (blue-chips, government bonds) may fetch preferential rates.
3. Maximum Loan & Repatriation 🌍
Loans against demat securities can go up to ₹20 lakh per individual. Repayment can be made via domestic NRO balances or inward remittances—no mandatory reconversion to foreign currency. 3
4. Key Documentation 📝
- Valid passport & overseas address proof
- NRE/NRO account statements with PIS permission
- Latest Demat account statement
- Income proof (if required for higher limits)
5. Tax & Compliance Tips 📋
Interest on LAS is not tax‐deductible for NRIs, but there’s no capital gains trigger since you’re not selling. Always declare LAS interest in your Indian ITR to avoid notices. 4
✅ Conclusion
LAS gives NRIs quick access to rupee funds without liquidating portfolios. By understanding LTV norms, repatriation rules, and documentation needs, you can optimize this tool for personal or business needs. At InvestoEdge, we guide NRIs through every step—reach out for a free consultation!