Who is an NRI?
A non residential Indian, NRI refers to Indian citizens who stay abroad for employment, business, and vacation.
Who is a PIO (person of Indian origin)?
A Citizen of a foreign country (other than a citizen of Bangladesh or Pakistan) is a PIO if:
He/She at any time held an Indian Passport
He/She or either of the parents or any of the grandparents was a citizen of India
He/She is a Spouse (not being a citizen of Bangladesh or Pakistan) of an Indian citizen (a) or (b) above
Why invest in India?
India is one of the fastest growing nations with serious growth prospects still looming. There is opportunity in India to generate large returns on investments. This has made India a prominent investment destination for all foreign investors NRI and PIO included.
What are the products offered to NRI/PIO?
  • Investments in equities under PIS on BSE and NSE
  • Derivatives trading on the BSE & NSE
  • Portfolio Management Services
  • Investments in Mutual Funds
  • Debt Investments of corporate and government
What type of Saving Bank Account(s) can be opened by NRI/PIO in India?
Any NRI/PIO can open two types of savings accounts with any bank in India. They are NRE and NRO bank accounts
What is an NRE Account?
A NRE bank account is an external saving bank account opened for NRI’s. This is why it is known as Non-Resident External account. Since it is an external account, the money is fully repatriable (can me moved out of the country) into any currency at the behest of the account holder
What is an NRO Account?
A NRO bank account is an ordinary saving bank account opened for NRI’s. This is why it is known as Non-Resident Ordinary account. Since it is an ordinary account i.e. as good as a normal saving bank account, money lying in NRO is not fully repatriable.
Can money be transferred from NRE A/C to NRO A/C?
Yes money can be freely transferred from NRE account to NRO account.
What is the status of NRO/NRE accounts on the return of the account holder to India?
RBI has advised banks to re-designate such accounts as resident accounts on return of the account holder to India.
In case a resident Indian becomes a non-resident, will he/she be required to change the status of his/her holding from Resident to Non-Resident ?
As per section 6(5) of FEMA, NRI can continue to hold the securities, which he/she had purchased as a resident Indian, even after he/she has become a non-resident Indian, but has to transfer the shares to his NRO (Non Resident Ordinary) account.
Can NRIs invest in shares, debentures and units of Mutual Funds in India?
NRIs are permitted to make direct investments in shares/ debentures of Indian companies/ units of mutual fund. They are also permitted to make portfolio investments i.e. purchase of share / debentures of Indian Companies through stock exchange. These facilities are granted both on repatriation and non-repatriation basis.
Can NRIs subscribe to IPO? What are the permissions/approvals required?
Yes. NRI can subscribe to IPO without any permission. The issuing company is required to take specific or general permission from GOI/RBI.
What is PIS?
Portfolio Investment Scheme (PIS) is a scheme of the Reserve Bank of India (RBI) defined in Schedule 3 of Foreign Exchange Management Act 2000 under which the ‘Non Resident Indians (NRIs)’ and ‘Person of Indian Origin (PIOs)’ can purchase and sell shares and convertible debentures of Indian Companies on a recognized stock exchange in India by routing all such purchase/sale transactions through their account held with a Designated Bank Branch.
  • PIS account is applicable only for NRIs and not for resident Indians.
  • It is only for trading in Indian markets and not any other foreign markets.
  • It is applicable only for equity trades and not MF investments.
How Many PIS accounts an NRI /PIO can have?
Any NRI or a PIO wanting to trade/make fresh investments in the Indian equity secondary market needs and must have one PIS account with only one designated bank in India.
What are the types of PIS account?
There are 2 types of PIS accounts
  • NRO PIS A/C.
Why is PIS required?
For all the Indian companies or companies listed on Indian stock exchanges, there are certain limits which have to be monitored under FEMA regulations. For any company the foreign investment into that company cannot cross certain limit. This limit is different from company to company and sector to sector. Also individually any NRI or a PIO cannot invest more than 5% in any Indian company.
How many PIS A/Cs can an NRI open?
NRI/PIO can open only one PIS account with any designated banks in a prescribed format for PIS account, upon which the bank can issue a PIS approval letter to the investor.
Can NRI invest in all products through PIS account?
No. Any investment done in secondary market should be routed through a PIS account. For other products the investment can be done through direct subscription route.
What is a NON PIS A/C?
It is a normal savings bank account, which can be opened with any bank in India. Non-PIS is an account for which the transactions are not reported to RBI. This account takes care of selling all those shares, which are not allowed under PIS. Shares acquired under IPO or received as gift or bought as resident Indian can be sold under Non-PIS account.
What are the types of NON PIS Accounts?
What types of transactions are allowed in a NON PIS a/c?
  • Sale of shares, which were, acquired other than PIS.
  • Shares acquired through IPO’s
  • Gifts from relatives or otherwise
  • Shares bought as resident Indian.
  • Investment in Mutual Funds
What is meant by investment through direct subscription route?
As per the regulations NRIs are allowed to invest up to a certain percentage of the total paid up capital of the company by directly subscribing to the equity/convertible debentures of the company either though a public offering made by the company or through private placements on one to one basis. Regulations provide for different ceilings on such investments based on the industry to which the company belongs and also the nature of investments (repatriation / non-repatriation basis).
Do investments made through IPO’s or Private placements come under PIS?
No, investments made by NRIs though subscription to IPO’s or private placements are not covered by PIS. Such investments are covered by RBI's regulations with regard to Foreign Direct Investments
Do NRIs need approvals from RBI for selling securities acquired through IPO’s/Private Placement?
No. NRIs can sell such shares/debentures on the Exchange without any approval. However, while seeking the credit of sale proceeds to NRE/NRO account, the bank should be provided with the details regarding date of allotment and cost of acquisition to calculate the taxes, if any
Can an NRI have investments under PIS on repatriation and non-repatriation basis?
Yes. Investment can be made on repatriation as well as non-repatriation basis. However, an NRI will have to open NRE account as well as NRO account with designated bank branch as the sale proceeds of non-repatriation investment can only be credited to NRO account.
Under what circumstances are investments made under PIS repatriated?
The repatriation of the sale proceeds, net of taxes, are allowed if the original purchase was made on repatriation basis and such investments were made out of funds from NRE/FCNR account or by means of remittance from abroad.
What are the provisions for corporate benefits for investment on repatriation and non-repatriation basis?
Corporate benefits may be in the form of dividend, interest, rights, bonus, etc. Any corporate benefit resulting out of investment in securities on non-repatriation basis will not carry the right of repatriation. Similarly any corporate benefit resulting out of investment in securities on repatriation basis will carry the right of repatriation. This is subject to change depending on prevailing RBI regulations.
Where can an NRI/PIO open a demat account?
NRI/PIO needs to open a demat account with any authorized DP
Can investments made under different schemes be held under a single demat a/c?
No. Securities received against investments under ‘Foreign Direct Investment scheme (FDI)’, ‘Portfolio Investment scheme (PIS)’ and ‘Scheme for Investment’ on non – repatriation basis have to be credited into separate demat accounts. Investment under PIS could be on repatriation or non – repatriation basis. Investment under FDI scheme is on repatriation.
What is the procedure of Dematerialization?
Client submits a DRF form along with the physical share certificate to a DP, who in turn forwards it to the Registrar & Transfer agent for confirmation from the company. After the confirmation is received the depositories credits the client a/c with the same no. of shares.
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