Investments FAQs

NRIs and PIO cardholders with Electronic Multiple Entry (EME) visas can invest in Indian stocks, mutual funds, and debentures through various channels:

• Direct Investment: They can purchase stocks and debentures directly through the Portfolio Investment Scheme (PIS). Mutual funds can be purchased directly from Asset Management Companies (AMCs) or online platforms.
• Demat Account (Optional for Mutual Funds): NRIs need to open a demat account with a Depository Participant (DP) in India if they are investing in stocks or debentures. Mutual funds typically don’t require a demat account.
• Bank Account: They must have an NRE (Non-Resident External) or NRO (Non-Resident Ordinary) account in India to manage the funds.
• Brokerage Account (Optional): They can use the services of SEBI-registered brokers to execute trades on their behalf (especially for stocks and debentures).

The Portfolio Investment Scheme (PIS) allows NRIs to invest in shares and convertible debentures of Indian companies on a recognized stock exchange. This scheme is governed by the Reserve Bank of India (RBI) and is designed to facilitate NRI investments in the Indian equity market. Under PIS, NRIs can buy or sell shares and convertible debentures through designated bank branches.

Yes, NRIs/PIOs can buy or sell shares and convertible debentures of Indian companies under the PIS. They must do this through a designated branch of an authorized dealer bank and route all transactions through this branch. The transactions must comply with RBI regulations regarding the ceiling on investments and other guidelines. NRIs can repatriate the sale proceeds and capital gains under the PIS scheme, subject to relevant regulations.

A designated branch is a specific branch of a bank authorized by the RBI to handle transactions under the PIS for NRIs. NRIs must route all their investment transactions through this branch to ensure regulatory compliance and streamlined processing.

No, NRIs cannot use multiple designated branches for their PIS investments. Each NRI must select a single designated branch of an authorized dealer bank to route all their investment transactions through the PIS.

Yes, NRIs can buy existing shares and debentures through private arrangements. However, they need to obtain prior approval from the Reserve Bank of India (RBI) for such transactions to ensure compliance with the Foreign Exchange Management Act (FEMA) and other relevant regulations.

Yes, NRIs can invest in public issues of Indian companies. They can subscribe to initial public offerings (IPOs) and follow-on public offerings (FPOs) of shares and debentures. The issuing company must have received general or specific approval from the Government of India or the Reserve Bank of India to allow NRI participation.

No, an NRI does not need RBI permission to open a demat account. However, they must comply with the rules and regulations set by the depository participants (DPs) and provide the necessary documents, such as proof of NRI status and PAN card, when opening the account. It’s important to note that a demat account is only required for NRI investments in stocks and debentures under the PIS scheme.

NRIs and PIO cardholders with Electronic Multiple Entry (EME) visas can open a Demat account with any Depository Participant (DP) registered with the National Securities Depository Limited (NSDL) or the Central Depository Services Limited (CDSL). They need to specify their NRI status (repatriable or non-repatriable) while opening the account.

No, NRIs cannot hold repatriation and non-repatriation securities in the same demat account. They must maintain separate demat accounts for holding repatriable and non-repatriable securities to comply with regulatory guidelines.

No, NRIs must use separate demat accounts for different investment schemes. 

For example, investments under the Foreign Direct Investment (FDI) scheme, Portfolio Investment Scheme (PIS), and non-repatriable basis must be held in separate demat accounts to ensure compliance with RBI regulations.

To close an investment account, an NRI must contact their designated bank branch and the Depository Participant (DP). They need to submit a written request for account closure along with necessary identification documents. All holdings in the account must be liquidated or transferred to another account before closure. 

 It’s important to be aware of any tax implications associated with closing an investment account in India. Consulting with a qualified tax professional is recommended.

Yes, NRIs can get loans abroad against the collateral of shares and debentures of Indian companies held by them. Authorized dealer banks can grant loans/overdrafts to NRIs through their overseas branches using these Indian securities as collateral, provided these securities were acquired on a repatriation basis (through permissible investment channels like PIS).