Non-Resident Indians are permitted to purchase stock and convertible debentures from a domestic organisation through stock exchanges. These investments can be made through the Portfolio Investment NRI Scheme, (PINS), on a repatriation or nonrepatriation basis.
A few simple facts about NRI Trading in India
According to the guidelines of the Reserve Bank of India, NRIs must open an account for trading with a designated institution. To route various investments, they must use a Non Resident Ordinary (NRO) or Non Resident External (NRE) account.
This account permits the purchase and sale of equities via the Indian stock exchanges. These accounts can also be classified as NRE or NRO PINS. NRE PINS permits transactions that allow funds to be repatriated abroad. NRO PINS accounts, on the other hand do not allow funds to be repatriated for transactions that have been executed.
This account can be used to invest in Initial Public Offers (IPO), or in mutual funds. Again, this account is classified as NRE or NRO Non-PINS. Transactions through NRE are eligible for repatriation, but NRO transactions cannot. NRO Non-PINS accounts also allow trading in options and futures.
PINS accounts work in the same way as NRE accounts. NRIs can trade in equities even if they have an NRE account. Users should remember that NRIs can only have one PINS account at a time.
Only authorized branches of dealers are allowed to open PINS accounts. These addresses can be found on the websites of each authorized dealer.
The application form for the PINS account must be filled out and submitted to the authorized dealer branch. Clients must also provide details about transactions in primary markets when submitting an application. Along with the application, a PINS Demat account must be completed.
NRI customers must submit a copy their passport, employment visa, or work permit, as well as proof of address, to open an online trade account. Along with the application form, the NRI customers must submit a copy of their passport, employment visa or work permit, as well as a PINS authorization letter from an authorized dealer. Photographs and proof that the account is depository and bank are also required.
The trading account knowledge is essential for NRIs to understand how they can make payments for investment purchases. Investments on repatriation are paid through inward remittances through regular banks channels or funds held in the NRE account. Non-repatriation purchases can be paid with funds in the NRO account.
Repatriation shares can be credited to NRE or NRO accounts. Funds received on a non-repatriation basis for securities sales can be credited to investors' NRO accounts.
All shares bought through NRI trading accounts are only eligible for sale in Indian equity markets. The RBI guidelines prohibit any private sale or gift arrangements.
Institutions are now offering a variety of products to satisfy the increasing demand for equity investing. These trading accounts offer NRIs flexibility and allow them to choose the one that best suits their needs in order to invest in Indian stock markets .