I am a US Citizen. I sent money to help out a relative (an Indian Citizen) in India. I used Western Union to transfer the funds from the US -- I paid in USD and he received the remittance in Rupees. He is to pay me back as this was a loan. Can he repay the money back to me in USD through Western Union or some other means? Are there any restrictions or limits? Thank you.

  • Do you have a written and signed loan agreement in place? Commented Aug 14, 2016 at 1:06
  • No. Only and oral agreement. I do have the money transfer records though, from Western Union.
    – Arrpee
    Commented Aug 14, 2016 at 17:41
  • The situation was a medical emergency ... under the circumstances and given the nature of the relationship, I could not ask for a loan agreement.
    – Arrpee
    Commented Aug 14, 2016 at 17:49

1 Answer 1


I assume that there is proper documentation.

Loan can only be credited to your NRO account.

See RBI regulation

Persons Resident in India borrowing in INR from NRIs/PIOs

2.1 Available routes for borrowing: Persons resident in Indian may borrow in INR from NRIs/PIOs under the following two routes:

2.1.1 Borrowing in INR by persons other than companies in India: A person resident in India, not being a company incorporated in India, may borrow in INR from NRIs/PIOs after satisfying the following terms and conditions:

Borrowing shall be only on a non- repatriation basis;

The amount of loan should be received either by inward remittance from outside India or by debit to NRE/NRO/FCNR(B)/NRNR/NRSR account of the lender, maintained with an authorised dealer or an authorised bank in India;

Period of loan shall not exceed 3 years;

Rate of interest on the loan shall not be more than two per cent above Bank Rate prevailing on the date of availment of loan;

Payment of interest and repayment of principal shall be made only to the NRO account of the lender.


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