Facts:

• Mr. Jack, a resident Indian, wants to purchase immovable property in the USA.
• He is seeking financing options from his bank.

What does the law say?

• The Liberalised Remittance Scheme (LRS) permits resident individuals to remit up to USD 250,000 per financial year for permissible capital account transactions, including acquisition of immovable property abroad.
• However, the LRS master directions explicitly prohibit banks from providing any credit facilities (loans/overdrafts) to resident individuals for capital account transactions under LRS.

Conclusion:

• Mr. Jack cannot avail credit or loan from his bank under LRS for purchasing property abroad.
• He must use his own funds or other permissible sources for remittance within the LRS limit.