Where can an NRI/PIO open a demat account?
Ans. NRI/PIO can open a demat account with any Depository Participant [DP] of NSDL. Almost every bank in India today also gives service of demat account . So, you can contact your bank , and they will do the rest .
Does an NRI need any RBI permission to open a demat account?
Ans. Generally permission is not required from RBI to open a demat account. However, credits and debits from demat account may require general or specific permissions as the case may be, from designated authorised dealers.
If NRI/PIO desires to make investments under different schemes, can he hold all such securities in a single demat account?
Ans. NRIs can not hold all types of securities in one single demat account. Separate demat account is required 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 basis.
Does an NRI require RBI permission for dematerialiation/rematerialisation of securities?
Ans. No special permission is required. Only those physical securities which already have the status as NR – Repatriable / NR- Non-Repatriable can be dematerialised in the corresponding Depository Accounts.
Can securities purchased under repatriable and non-repatriable category be held in a single demat account?
Ans. No. An NRI must open separate demat accounts for holding ‘repatriable’ and ‘non-repatriable’ securities.
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?
Ans. 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?
Ans. Yes. It is the responsibility of the NRI to inform the change of status to the designated authorised 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.
Can NRIs invest in shares, debentures and units of mutual funds in India?
Ans. 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 an NRI purchase securities by subscribing to public issue? What are the permissions /approvals required?
Ans. 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.
Does an NRI require any permission to receive bonus/rights shares?
Ans. No.
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