An NRI is an Indian citizen who stays outside India. a. For purposes of carrying out employment or any business or vocation. b. Under circumstances indicating an intention to stay outside India for an uncertain duration. Any Indian citizen deputed outside India for a temporary period in connection with employment.

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 OR He/She or either of his parents or any of his/her grandparents was a citizen of India OR Spouse (not being a citizen of Bangladesh or Pakistan) of an Indian citizen (a) or (b) above.

NRI can invest in the following products. Equity trading on BSE and NSE , Derivatives, Mutual funds, Portfolio Management Investments in Mutual Funds& Bank FDs.

An NRI should open a new bank account (NRE/NRO or both) with designated bank which is approved by RBI (Reserve Bank of India) for this purpose. He should apply for a general approval for investment in Indian Stock Market through his designated bank branch. He should open a Demat Account with a broker to hold his shares and register to execute his buy/sell orders on the stock exchange(s). To invest through Mutual funds, NRIs should fulfil all NRI KYC requirements with AMCs then he or she has to register on BSE/NSE platforms available with the MF distributor and link their NRE Bank account to execute all the future transactions in mutual fund schemes.

Any NRI/PIO can open two types of savings accounts with any bank in India. They are NRE and NRO bank accounts.

A NRE bank account is an external saving bank account opened for Non resident Indians. This is why it is known as Non-Resident External account. Since it is an external account, any monies lying in NRE account can be taken outside the country or in other words, the monies lying in NRE account are fully repatriable. This money can be converted into any foreign currency at the behest of the account holder and can be remitted outside the country.

A NRO bank account is an ordinary saving bank account opened for Non resident Indians. 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, monies lying in NRO account cannot be taken outside the country or in other words, the monies lying in NRO account are not repatriable.

Yes money can be freely transferred from NRE account to NRO account.

RBI has advised banks to re-designate such accounts as resident accounts on return of the account holder to India.

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.

NRIs are permitted to make 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.

Yes. The issuing company is required to issue shares to NRI on the basis of specific or general permission from GOI/RBI. Therefore, individual NRI need not obtain any permission.

No

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. 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. Notes: 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.

There are two types of PIS account: NRE PIS account NRO PIS account.

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.

NRI/PIO can open only one PIS account with any designated banks (Preferred bank – UTI Bank) in a prescribed format for PIS account, upon which the bank can issue a PIS approval letter to the investor.

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.

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.

There are two types of NON PIS account NRE NON PIS account NRO NON PIS account.

Sale of shares which were acquired other than PIS. Shares acquired through IPO’s. Gifts from relatives or otherwise. Shares bought as resident Indian. Fresh acquisition through IPO’s. Investment in Mutual Funds.

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).