FAQs

NRI

  • Who is a non-resident Indian (NRI)?

    Non-Resident Indian (NRI) means a "person resident outside India" who is a citizen of India or is a person of Indian origin as per FEMA regulations.
  • Who is a 'person resident outside India'?

    • Under the Foreign Exchange Management Act, 1999 (FEMA), a person who is NOT a 'person resident in India', as defined under Section 2 (v) of the Act is considered as a 'person resident outside India'.
    • The most important change in definition (since FERA 1973) is that the citizenship of a person no longer has a bearing in determination of residential status.
  • Who is a 'person of Indian origin'?

    • 'Person of Indian Origin' (PIO) means a citizen of any country other than Bangladesh or Pakistan, if
      1. he at any time held Indian passport; or
      2. he or either of his parents or any of his grandparents was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955; or
      3. the person is a spouse of an Indian citizen or a person referred to in sub-clause [a] or [b].
    • Investment by PIO in Indian Securities is treated the same as the investment by non-resident Indians and requires same approvals and enjoys the same exemptions.
  • What is a Portfolio Investment Scheme (PIS)?

    • Portfolio Investment Scheme (PIS) is a scheme of Reserve Bank of India under which Non Resident Indian (NRIs) can purchase/sell securities permitted by RBI from time to time of Indian companies on Stock Exchanges under Portfolio Investment Scheme.
    • For this purpose, the NRI/PIO has to apply to a designated branch of a bank, which deals in Portfolio Investment. All sale/purchase transactions are to be routed through the designated branch.
  • In which bank accounts I can open PIS account?

    • YES bank
    • HDFC Bank
    • Federal Bank
    • Axis Bank
  • What are the different types of accounts permitted to be maintained by NRI?

    Two types of rupee accounts viz. Non Resident (external) Rupee Accounts (NRE) and Ordinary Rupee Accounts (NRO) are permitted to be maintained by NRIs. Funds in NRE Account are repatriable.
    • NRO account
      • A NRO bank account is an ordinary saving bank account opened for NRIs. The funds standing to the credit of this account cannot be repatriated outside India in foreign exchange, without prior permission of RBI.
      • NRIs can open NRO account for transactions in rupees without any approval. NRO account can be maintained in the nature of current, savings, recurring or fixed deposit account.
    • NRE account
      • A NRE bank account is an external saving bank account opened for Non resident Indians. NRE account can be opened without any approval as the funds for this account are transferred in freely convertible foreign currency.
      • Credits to the accounts should be in the form of remittance in foreign exchange from outside India, as well as other funds, which are eligible to be remitted outside India, in free foreign exchange.
      • This account can be maintained in the form of saving or current or recurring or fixed deposit account.
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  • What are the documents required to open NRI trading account?

    • Indian address proof (not required in case of NRE)
    • Foreign address proof (Mandatory both cases)
    • PIS Letter (issued by RBI)
    • PAN card
    • Bank Account Statement/ Passbook Bank proof should indicate NRE/NRO saving a/c bank details
    • If NRE or NRO is not mentioned (pre printed) on cheque, then bank verification letter is required.
    • All the photocopy of the KYC document should be attested by the any of the entities: Notary Public, any Court, magistrate, judge, Local banker, Indian embassy, Consulate General of the country where NRI is residing.
  • Under which segments NRI can invest in India through a stock Exchange?

    • NRIs can invest under the Portfolio Investment Scheme (buying through the secondary market) and through the Direct Subscription Route (Investments though IPOs). Under below segments customer can invest:
    • Equity – Only Cash
    • IPO
    • Mutual Fund
    • Futures
    • Options
    • Exchange Traded Funds.
  • Can NRI place Intraday order?

    • No. NRI's not allowed to do Intraday transaction. They can only trade on delivery basis.
    • Short selling is not allowed.
  • Can two separate trading accounts namely (NRE & NRO) can be opened by NRI?

    Yes. Clients can have two separate trading accounts based on NRE & NRO.
  • Can NRI trade in Currency derivative segment of the Exchange?

    No. NRI's cannot trade in Currency derivatives segment.
  • Can trading account be opened for person’s resident outside India who had been allotted shares under ESOP scheme?

    Listed Indian companies are allowed to issue shares under the Employees Stock Option Scheme (ESOPs), to its employees or employees of its joint venture or wholly owned subsidiary abroad who are resident outside India, other than to the citizens of Pakistan. Trading account can be opened for person’s resident outside India only for the sole objective of selling of shares acquired under ESOP Scheme.
  • Can rights/bonus shares be issued to NRI?

    FEMA provisions allow Indian companies to issue Rights / Bonus shares to existing non-resident shareholders, subject to adherence to sectoral cap as may be applicable
  • In case a person who is resident in India 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, on a non-repatriable basis.
  • In case a non-resident Indian becomes a resident in India, will he/she be required to change the status of his/her holding from Non-Resident to Resident?

    • Yes. It is the responsibility of the NRI to inform the change of status to the designated authorized dealer branch, through which the investor had made the investments in Portfolio Investment Scheme and the DP with whom he/she has opened the demat account.
    • Subsequently, a new demat account in the resident status will have to be opened, securities should be transferred from the NRI demat account to resident account and then close the NRI demat account.
  • In case a non-resident Indian becomes a resident in India or vice versa, will he/she be required to open a new trading account?

    Yes, customer needs to open a new trading account.
  • Where can customer check the banned scrips?

    List of caution/banned RBI scrip is available at https://www.rbi.org.in/scripts/BS_FiiUSer.aspx.
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