RBI approval not needed for property deals by NRIs

The Reserve Bank of India (RBI) has said that non-resident Indians (NRIs) and Overseas Citizens of India (OCIs) do not require prior approval from the central bank for acquisition and transfer of immovable property. The central bank’s clarification comes in the wake of the February 2021 Supreme Court order, which said that any sale or gift of property by a foreigner without prior permission from the RBI would be invalid.

The order had quoted Section 31 of the Foreign Exchange Regulation Act, 1973. The court was dealing with a property that was transferred by the widow of a foreigner and owner without obtaining prior permission of the RBI. The apex court had set aside a Karnataka high court order.

“The concerned Supreme Court judgment dated February 26, 2021 in Civil Appeal 9546 of 2010 was related to provisions of FERA, 1973, which has been repealed under Section 49 of FEMA, 1999,” said the RBI in a press release. “At present, NRIs/OCIs are governed by provisions of FEMA 1999 and do not require prior approval of the RBI for acquisition and transfer of immovable property in India, other than agricultural land/farm house/plantation property,” the central bank said.