Andhra Bank
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Nri Products And Services

Loans/ Overdrafts Against Deposits

NRIs are permitted to avail loans/Over drafts against the security of Term deposits held by them under NRO/NRE/FCNR(B) schemes .

While availing loan the following points will be taken in to consideration by our Bank.

  Purpose Of The Loan

Advances against NRE/FCNR(B)  and NRO deposits can be granted for any purpose except the following.

   i)In the business of chit fund, or    
  (ii)  As nidhi company , or     
  (iii) Agricultural or plantation activities or real estate business; or construction of farm houses or
   (iv) Trading in transferable development rights (tdrs).     

For the purpose of sub-clause (iii) of clause (1), real estate business shall not include development of townships, construction of residential/ commercial premises, roads or bridges.

In the case of Loans against NRO Deposits, all the rules pertaining to Domestic Deposit apply except the above restriction on purpose of the Loan.

  Loans Can Be Available by NRI himself / Her Self Or By Third Parties

The Loan is treated as given to “self” in the following cases:

When a loan or an advance is granted against a FCNR (B) term deposit which stands in the name of :

  • the borrower either singly or jointly
  • one of the partners of a partnership firm and the advance is made to the said firm
  • the proprietor of a proprietary concern and the advance is made to such a concern
  • a ward whose guardian is competent to borrow on behalf of the ward, and where the advance is made to the guardian of the ward in such capacity

In case Third party is availing loan against the Deposit, the following points are to be noted.

  • There should be no direct or indirect foreign exchange consideration to the Non-Resident depositor.
  • The Non-Resident depositor should furnish an irrevocable undertaking to authorized dealer branch that he would not  withdraw the deposit during the period of loan/overdraft
  • While processing the application, the usual norms and considerations apply as in the case of normal advances to trade/industry and satisfy themselves as to acceptability of purpose, genuiness of credit need of borrower and end-use of funds and not  solely guided by availability of security.                                                                                                                           
  • The loan should be utilized for personal purpose or for carrying on business activities other than agricultural/plantation or real estate business or for re-lending.
  • The period of the loan shall not exceed the unexpired period of maturity of the deposit accepted as security           
  Rate Of Intrest

a) In the case of Loan to the Depositor himself/herself




Loan against NRO Depoists

Deposit Rate +2%


Loan againt NRE Depoists

If repayment is by inward remittances /adjustment of deposit/Transfer from NRE/FCNR

Deposit Rate +2%



If repayment is by rupee funds in NRO accounts

Deposit Rate +3%

Loans against FCNR(B)Depoists

When availed in Foreign Currecy

Deposit Rate +2%

15 to 25% depending on the remaining period of deposit.

When availed in Indian Rupees


In case the deposit is cancelled prematurely, the revised interest rate paid on the deposit shall be reckoned for the purpose.  In case the rate of interest payable on a term deposit held as security is Nil due to premature closure before the expiry of minimum period prescribed for interest eligibility, the rate of interest on the loans against such deposit is BMPLR +3.50% spread. BMPLR means Bench Mark Prime Lending Rate prescribed by the bank. This changes from time to time and will be announced in Press.

b)In the case of Loan to third parties.

When Loans against Deposits are given to third parties, it is treated as commercial Loan/advance and Rate of Interest charged and also Margin is applicable as per the segment to which the Loan/advance belongs and/or as per credit rating of the borrower, wherever credit rating is applicable.

  Repayment Of The Loan



1.Loan availed in Rupees

By Inward remittances/To the debit of NRE/NRO account/By maturity proceeds of the Deposit

2.Loan availed in Foreign Currency

By Inward remittances/By maturity proceeds of the Deposit.
If the repayment is in currency other than that of currency in which loan is availed, Depositor has to bear the cross currency exchange risk.

3.Loan availed by Third Party

As per the terms and conditions of the Loan sanctioned and / or before the maturity/closure of the deposit.