A Non- Resident Indian (NRI) means a ‘person resident outside India’ who is a citizen of India or is a ‘person of Indian origin’ and stays outside for the purpose of employment, business or vocation, or under circumstances indicating an intention to stay outside for an uncertain duration.
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.
‘Person of Indian Origin’ (PIO) means a citizen of any country other than Bangladesh or Pakistan, if:
NRI/PIO can open a Demat A/C with any Depository Participant (DP) of NSDL/CDSL. (Comfort Securities is a depository participant of CDSL). The NRI/PIO needs to mention the type (‘NRI’ as compared to ‘Resident’) and the sub-type (‘Repatriable’ or ‘Non-Repatriable’) in the account opening form collected from the DP. No permission is required from RBI to open a Demat Account.
Following is the process for NRI to invest in Indian Capital Markets
NRI may invest under the Portfolio Investment Scheme (PIS Scheme) and through the Direct Subscription Route.
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’ and ‘Person of Indian Origin’ 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.
For all Indian Companies or companies listed on Indian Stock Exchange, there are certain limits of foreign investment, which are to be monitored under FEMA regulations. Any NRI or PIO cannot invest more than 5% of the paid up equity capital in any Indian Company.
The Client needs to apply for a general approval for investment in Indian Stock Market through his designated bank branch, where he holds his NRE/NRO account. The application is submitted to a designated branch of an authorized dealer in India in the prescribed form. No permission is required from RBI.
Funds remitted from abroad or local funds, which can otherwise be remitted abroad to the account holder, can be credited to NRE Accounts. Local funds, which do not qualify for remittance outside India, are required to be credited to NRO accounts.
Yes, money can be transferred freely from NRE Account to NRO Account. However, money cannot be transferred from NRO Account to NRE Account even if it is transferred by mistake from NRE to NRO Account.
NRI's are allowed to trade only in following trading segments in the India Stock Market:
Note: NRI's are NOT allowed to trade in Equity Intraday segment (day trading) and Currency derivatives.
The Intraday trading in Equity segment is not allowed to NRI's by RBI.
Yes. A power of attorney holder can manage portfolio on behalf of NRIs. However, he cannot affect remittance outside India.
With Comfort Securities, Indians across the Globe can invest in the India Story and make the most out of it. Comfort Securities offers a variety of investment services and products to its fellow Indians across the globe and makes their life simpler with its latest technology and dedicated customer support. Comfort Securities offers the maximum ease and comfort to all its fellow Indians in enabling them to trade in the Indian Markets and derive the maximum value to their portfolio.