I am getting many queries from NRI readers about their investment in India. One of the question is, what are the procedures to start investing in the Indian stock market by maintaining the NRI status. In this article I will be listing the few points which needs to be done before start investing. If you have any doubts, please post it in the comments section. If you like the article, get free email updates.
How NRI can invest in Indian Stock Market?
- If you are NRI, then you must have the NRE demat account, Savings Bank account and Portfolio Investment Scheme (PIS) and trading account.
- If you want to bring the share income to India, then you must have the NRO account.
- NRO and NRE demat account you can open it from any of the agents or your banker.
What is Portfolio Investment Scheme (PIS)?
This is similar to the NRE/NRO savings a/c. The NRI can trade in the secondary stock market with Repatriation (from NRE PIS a/c) and on non-repatriation basis(from NRO PIS a/c). Demat a/c’s can be opened with signatures of Power of Attorney(POA).
How do I apply for PIS?
The application is to be submitted to a designated branch of an authorized dealer in India in the prescribed form.
Reserve Bank has authorized a few branches of each authorized dealer to conduct the business under Portfolio Investment Scheme on behalf of NRIs. These branches are the main branches of major commercial banks. NRIs will have to route their applications through any of the designated authorized dealer branches who have authorization from Reserve Bank.
The banks Authorized to accept PIS applications are HDFC, UTI, ICICI Bank
Summary
I hope this article would be very useful for the NRI readers. It has only the basic ideas on opening the trading account. I will write the detailed procedures in the future articles. I am happy to help them if they have more queries related to the topic. If you have any doubts, please post it in the comments section.
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April 10, 2010 at 8:52 pm
Can PIS can be ioerated through STATE BANK OF INDIA .
If some resindent in India having demat and online tdrading account subsequently beocmes NRI what procedure to be followed to deal with shares already purchaes and subequent trading tranctions.
June 8, 2010 at 5:09 am
Can an NRI have more than one broker to trade in shares?
Can an NRI make day trades if the amount is not repatriable?
June 8, 2010 at 5:46 am
Hi krishna, your post topics are of strong interest to many of us NRIs but sometimes leave us more confused than before. For example in this “How NRI’s can invest in Indian share market” post you say “If you are NRI, then you must have the NRE demat account” but later also say “The NRI can trade in the secondary stock market … … on non-repatriation basis(from NRO PIS a/c)”. So must an NRI have to have a NRE demat or an NRO will do as long as its on a non-repatriation basis? Thanks for all the info you provide … will appreciate further clarification.
June 8, 2010 at 12:09 pm
NRI can open either NRE or NRO account. You don’t need both unless you have income from Indian sources. In that case, Rupee income from Indian sources can only be deposited in NRO account. NRE or NRO account can be linked to your trading account for investment purposes. Following web page has more information:
http://www.profitshastra.com/services.html
February 23, 2013 at 4:03 pm
I am a NRI. While I was in India (before getting NRI status), I opened Demat & Trading account with Edelweiss. I have linked my Resident savings account to fund my purchases. Shall I continue to trade with the same now?
I am not clear about PIS. Could you please explain more on PIS?
February 24, 2013 at 7:32 am
Hi Bala,
If you want to follow rules, you can not continue the same account for the trading. When you become NRI, you must change the status of your savings account to NRE or NRO.
PIS – It is a special purpose scheme for NRI to buy and sell shares in Indian market. This scheme is linked to the NRE or NRO account. In sime terms, you get this scheme if you want to buy shares in India. You may have to follow the steps:
1. First convert your Indian savings account to NRE / NRO
2. Open PIS account with the bank
3. Link your NRE / NRO account to PIS
4. Participate in the Indian market.
I have written a details articles after reading your questions, please follow the details provided here:
http://www.thinkplaninvest.com/2013/02/portfolio-investment-scheme-pis/
Thanks,
Krishna
June 8, 2010 at 8:33 pm
Hello Profitshastra,
Thank you for the response.
Thanks,
Krishna
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December 20, 2011 at 12:50 am
Dear Sir/Madam, I have taken insurance for my father in Reliance a policy called RLIC-Highest NAV Advntg. From last one and half year i am paying premium of Rs. 25,000 /six months. So till now i paid 75,000 but the present fund value is 60,458 Rs only. I am worried whether to continue or exit. Please help me with your kind suggestion.
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June 15, 2012 at 9:33 am
i was trading online using MOSL in india
Recently I have migrated abroad
Can I keep on trading online. or should I do some changes?
June 16, 2012 at 6:33 pm
Hello Vimoj,
Are you asking about trading from your Indian trading account or want to invest directly from your foreign account?
Thanks,
Krishna
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