Taking a loan from a foreign national may not be possible automatically

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My uncle and aunt adopted me informally (my uncle is my father’s older brother and his wife is my mother’s older sister). I was about three years old when it happened. After about two and a half years of living with them, my aunt gave birth to a son. I lived with them until I finished my professional studies at the age of 24. My uncle and aunt introduced me as their eldest son, but this did not translate into reality as they did not give me any part of their fortune. They kept everything for their real son. Is there a law for me to claim a certain percentage of their wealth?

—Name hidden on request

We understand that no formal and legal process was followed by your uncle and aunt for your adoption and further assume that you are Hindu and your uncle and aunt are following / have also followed Hinduism. You may note that Indian Hindu, Jain, Buddhist or Sikh citizens are allowed to formally adopt a child and the adoption complies with the Hindu Adoption and Maintenance Act 1956.

To answer your question, if you want to claim part of their estate, you would be required to prove the fact of the adoption (the burden of proof is on the person seeking to move the natural estate by alleging an adoption), which must be valid under Hindu Adoption and Maintenance Law (with or without a registered document) or any other custom or usage under which there may be a sanctity in adoption, which in your case, if not done legally, may not be possible.

Can a friend who is a citizen of another country offer me (an Indian citizen) a loan? A friend is ready to give me a ??Loan of 5 lakh to help me overcome my financial problems. But I don’t know if this complies with FEMA regulations.

—Name hidden on request

People residing in India can borrow, both in rupees or in foreign currency; but conditions apply. In the event of an INR loan from NRI / PIO, these general conditions must be respected …

* The loan will be made only on a non-repatriation basis.

* Loan amount must be received either by inbound transfer from outside India or by debit to Lender’s NRE / NRO / FCNR (B) / NRNR / NRSR account held at a dealer / bank licensed in India.

* The duration of the loan cannot exceed three years.

* The interest rate on the loan must not be more than 2% higher than the bank rate in effect on the date the loan is taken out.

* Interest payment and principal repayment will only be made to the lender’s NRO account.

The terms and conditions are prescribed under the Foreign Exchange Management (Borrowing and Lending) Regulations 2018 for foreign currency borrowing from NRIs / PIOs. However, a loan from a foreign national to an Indian citizen through the automatic route may not be possible.

Aradhana Bhansali is a partner, Rajani Associates.

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