FAQs
Residential Status
Bank Account
Investment Routes
Service Providers
Listed Securities
Investment routes
Portfolio Management Scheme ('PMS')
Portfolio Investment Scheme ('PIS')

Residential-status related

NRI: You're an Indian citizen living abroad for over half the year.

  • - You are a citizen of India.
  • - You live outside India for more than 182 days in a year in the Preceding Financial Year. Preceding Financial Year means the financial year, which ended on the last 31st of March.
  • - Your reason for living abroad could be employment, business, education, or any other purpose with an uncertain duration of stay.

PIO: You're a citizen of another country with Indian roots either through yourself, your parents, grandparents, or marriage.

  • - You are a citizen of any country except Bangladesh or Pakistan.
  • - You previously held an Indian passport.
  • - You or either of your parents or grandparents were citizens of India.
  • - You are a spouse of an Indian citizen or someone who meets the above criteria.

OCI: You are an OCI if you meet any of the following criteria:

  • - You are a citizen of another country, but you were a citizen of India on or after January 26, 1950.
  • - You are a citizen of another country, but you were eligible to become a citizen of India on January 26, 1950.
  • - You are a citizen of another country, but you belong to a territory that became part of India after August 15, 1947.
  • - You are a child, grandchild, or great-grandchild of someone who meets any of the above criteria.
  • - You are a minor child whose parents are either both Indian citizens or one parent is an Indian citizen.
  • - You are a foreign spouse of an Indian citizen or an OCI cardholder. The following conditions apply:

    • You are married to an Indian citizen or an OCI cardholder (registered under section 7A of the Citizenship Act, 1955).
    • Your marriage must have been registered and lasted for at least two years before applying for the OCI card.
    • You will need to undergo a security clearance by a competent authority in India.

Please refer to our response to Q

No, you do not need to be physically present outside of India to maintain your OCI status. As long as you remain registered under Section 7A of the Citizenship Act, 1955 and hold your OCI card, you can enjoy the benefits of OCI status (lifetime visa-free entry, property ownership, etc.) even if you live in India.

However, it is important to keep a few points in mind:

  • You cannot apply for OCI while in India on certain visas: Tourist, Missionary, and Mountaineering visas are not valid for OCI registration within India.
  • 'Ordinarily Resident' in India: If you spend more than six months continuously in India, you might be considered "ordinarily resident" and face challenges applying for or renewing your OCI status.

You can live in India as an OCI, but maintain your status by registering and holding the OCI card. Just be mindful of visa restrictions when applying and avoid residing in India for extended periods to avoid complications.

PIO is a broader term representing Indian origin.
OCI is a specific legal status granting long-term residency and benefits in India.

  • 1. Who they are:
    • PIO:A foreign citizen with Indian ancestry through themselves, parents, grandparents, or great-grandparents.
    • OCI: A foreign citizen with Indian origin who can live and work in India long-term.
  • 2. Scope and benefits:
    • PIO:Limited immigration benefits; requires registration if staying in India for over 180 days.
    • OCI: Visa-free entry for life, study, work, and live in India; own property; invest; similar to Indian residents in many ways.
  • 3. Family coverage:
    • PIO: Covers self, parents, grandparents, great-grandparents, and spouse.
    • OCI: Covers self, parents, and grandparents.
  • 4. Duration:
    • PIO: Card valid for 15 years; renewable.
    • OCI: Card valid for a lifetime.
  • 5. Relationship:
    • Not all OCIs are PIOs:
      Only if an OCI cardholder has Indian ancestry through themselves, parents, or grandparents.

    • All PIOs can apply for OCI: But not all PIOs necessarily choose to do so.


Bank Account Related


Yes.

As an NRI, Banks are permitted to open the following bank accounts:

  • 1. Non-Resident External (NRE) Bank Accounts
  • 2. Non-Resident Ordinary (NRO) Bank Accounts

In cases where an account holder holds a Resident Bank account (single or joint) before their NRI status begins, they have the option to convert their existing account to an NRO account. This conversion process involves contacting the bank and completing the necessary formalities

Yes.
As stated earlier, OCI cardholders fall under the category of PIOs (Person of Indian Origin).

PIOs have the authorization to open and manage these accounts with authorized dealers and banks, including cooperative banks that are specifically permitted by the Reserve Bank to maintain such accounts.

Account type /Residential Status Resident Account NRO NRE Accounts
NRI Not-permitted Permitted Permitted
PIO Not-permitted Permitted Permitted
OCI Permitted in certain cases Permitted Permitted

Please note- Certain conditions apply regarding:

a) Eligibility criteria for joint account holders.
b) Restrictions on citizens from specific countries who may be prohibited from opening accounts.

Account holders are advised to contact their respective banks for guidance on the specific eligibility criteria or any related restrictions that may apply in their case.

Similarities:
. NRE and NRO accounts are Indian Rupee accounts.
. NRE and NRO accounts can be opened as savings as well as current accounts

Key Differences:

NRE Accounts NRO Accounts
Balance freely repatriable. Balances repatriable up to INR equivalent of USD 1 Million per financial year, net of applicable taxes
Account is tax free from interest earned on balances perspective
Permitted credits include: Permitted to credit income originating in India such as salary, rent, interest, dividend etc
a) Inward remittances from outside India
b) Income earned on investments made through the NRE Account including maturity value/proceeds
c) Transfer from other NRE account

. For NRI: PAN Card
. For OCI: OCI Card and PAN Card

Service providers may offer informal recommendations for professional firms that can assist NRIs/OCIs in this matter. Investors are encouraged to independently contact and engage these professional firms for their expertise



Securities Related





Investment in listed securities related


Yes

Yes. Broadly there are two investment routes available for NRIs and OCIs


PIS: NRIs and PIOs have the opportunity to engage in India's primary and secondary capital markets via the Portfolio Investment Scheme (PIS), regulated by the Reserve Bank of India. Through this scheme, NRIs can purchase and trade shares/debentures of Indian companies on Indian stock exchanges. Specific conditions govern repatriation/non-repatriation and the percentage of investment in the listed company's paid-up share capital. Banks providing PIS as a service might levy charges that can vary among different banks.


PMS: Many brokerage firms, investment advisory firms, wealth management firms, and SEBI-registered banks provide Portfolio Management Schemes (PMS) as a product, acting as Portfolio Managers. This offering is tailored for investors seeking exposure to the Indian equity market but lack either the time or expertise to handle their portfolios. PMS comes in two variations and caters to this investor class.


Discretionary PMS: Under this category, the Portfolio Manager autonomously handles investors' funds in alignment with their specified investment objectives.


Non-discretionary PMS: In this category, the Portfolio Manager exclusively oversees the portfolio based on the investor's instructions and guidance.


SEBI-regulated Portfolio Managers may offer various schemes or products tailored to suit potential investors' specific investment strategies, objectives, risk profiles, and more.


The Portfolio Manager will levy charges on the investor, which may include:

  • a) Computed as a percentage of the portfolio's value or average value over an agreed billing period.
  • b) Determined as a percentage of profits or a fixed amount based on the excess return achieved beyond the specified benchmark return.


Yes.It is mandatory for all Bank, Demat, Trading, and Portfolio Accounts to be established in the name of the Investor. Therefore all securities procured through PMS or PIS Schemes will be maintained and traded in an account linked to the investor which will be identified by a unique number.

Yes.

In India, listed securities encompass shares, debentures, or any tradable securities processed through an exchange. Listing signifies the acceptance of a company's securities for trading on a stock exchange.

From the standpoint of an NRI/PIO/OCI investor, securities are maintained in a dematerialized format within the investor's account, established and managed with a chosen Depository Participant.

This account can be held with either of the two depositories:
National Securities Depository Limited or Central Depository Services (India) Limited.


Service Providers related


Depending on the residential status and investment route, Investor will be required to appoint any/all of the following Service Providers who are regulated by SEBI and/or RBI

. Bank
. Bank - Custodian
. Non-bank - Custodian
. Depository Participant
. Broker - Trading Member of Stock Exchange
. Portfolio Manager

The investor holds sole responsibility for selecting a service provider. It is important to note that service providers may collaborate with other Service Providers, disclosing preferred names of such Service Providers while offering their products.

Every Service Provider may levy charges on the investor for the services or products they provide.

Outlined below are the key roles of each Service Provider:

Bank: Open and maintain the Bank Accounts for NRE/PIO/OCI and monitor permissible credits and debits depending upon the nature and objective of the account opened. Banks are regulated by the Reserve Bank of India.

Bank - Custodian / Non-bank - Custodian: A Custodian of Securities, whether a Bank or a non-Bank entity, refers to a Service Provider registered under the Securities and Exchange Board of India (Custodian) Regulations, 1996, specializing in custodial services. These entities generally establish and manage Custody/Safekeeping Accounts for investors, reflecting the securities acquired/traded by the investor. Additionally, they provide supplementary services such as tailored reports.

Depository Participants: A DP is an agent of the two Depositories in India, namely NSDL and CDSL. DPs, governed by SEBI, act as intermediaries between a depository and an investor, facilitating the trading, transfer of ownership, and settlement process. DPs open and maintain Demat Accounts in the name of investors.

Broker: All brokers are members of the Stock Exchange and operate under specific SEBI regulations. Exchanges provide four categories of memberships:

  • a) Trading Members:Conduct trades both for their own accounts and on behalf of their clients. However, the clearing and settlement of these trades are managed through either a Trading-cum-Clearing Member or a Professional Clearing Member.

  • b) Trading cum Self Clearing Member: Executes and manages the clearance and settlement of trades conducted both for their own account and on behalf of their clients.

  • c) Trading cum Clearing Members: Executes trades for their own accounts and their clients' accounts. Additionally, they handle the clearance and settlement of trades conducted by themselves and other trading members who opt for their clearing services.

  • d) Professional Clearing Members: Such as Custodians, facilitate the clearance and settlement of trades for Exchange members who opt to use their services for this purpose.


Portfolio Manager: A portfolio manager, as a corporate entity, assumes the duty of managing or administering a collection of securities or a client's funds. These managers are registered and governed by distinct SEBI Regulations.

Service providers, if eligible under applicable regulations, Service Providers may offer some or all of the services mentioned above to investors as a composite product and/or service.

From Service Providers' perspective:
The investor will go through the subsequent phases with each of the Service Providers:

  • KYC Procedures
  • On-boarding
  • In-person Verification ('IPV')**
  • Account Opening

During these stages, the investor will need to furnish documents, information, and undergo in-person verification via physical or electronic methods as mandated by SEBI and/or RBI. Although the procedures and documentation/information requirements will be similar among Service Providers, each Provider may have additional documentation/information prerequisites that must be complied with.

**In-person verification (IPV) is a mandatory process for all intermediaries (i.e. Brokers, Custodians, Portfolio Managers) to establish the individual's identity. Only the IPV performed by a SEBI-approved intermediary will be taken into consideration. Some Service Providers may stipulate certain Investors domiciled in certain jurisdictions (e.g. US-based NRI) to be physically present in India for execution of documentation.

From Investor's perspective:

  • Chooses the investor status/investor eligibility - i.e. NRE, NRO, OCI, FPI etc.
  • Chooses the investment route viz. PIS and/or PMS
  • Chooses the Service Provider(s)
  • Chooses the Scheme/Product(s) offered by the Service Provider
  • Subjects to KYC and account opening documentation of the Service Provider

No.


Investment routes related


Investor Investment Route / Scheme
Resident Equity Trading Listed Securities
F&O Trading Futures and Options
PMS Listed Securities
Non-resident (Ordinary) Equity Trading Listed Securities
F&O Trading Futures and Options
PMS Listed Securities
Non-resident Indian NRE PIS Listed Securities
Non-Resident Indian NRE PMS Listed Securities
Foreign National - Natural Person FPI PMS Listed Securities
Foreign National - Legal entity FPI PMS Listed Securities
Foreign National - Natural Person FPI PIS Listed Securities + Futures & Options
Foreign National - Legal entity FPI PIS Listed Securities + Futures & Options
Foreign National - Natural Person FPI PMS Listed Securities + Futures & Options
Foreign National - Legal entity FPI PMS Listed Securities + Futures & Options

No, unless a foreign national (not categorized as an NRI or OCI) intends to invest specifically as a Foreign Portfolio Investor

No, unless a foreign national (not categorized as an NRI or OCI) intends to invest specifically as a Foreign Portfolio Investor.




Investment routes - Accounts to be opened / maintained related


Investor Investment Route / Scheme Investment Choice (where to open accounts) typically influenced by Broker Custodian Bank
Resident Equity Trading Listed Securities Broker Trading and Demat Account Bank Account OR 3 in 1 (Bank, Trading, and Demat) Accounts where such service is offered
F&O Trading Futures and Options Broker Trading Account Bank Account OR 3 in 1 (Bank, Trading, and Demat) Accounts where such service is offered
PMS Listed Securities SEBI registered Portfolio Manager or Broker who is SEBI registered Portfolio Manager Trading and Demat Account Bank Account
Non-resident (Ordinary) Equity Trading Listed Securities Broker Trading and Demat Account Bank Account OR 3 in 1 (Bank, Trading, and Demat) Accounts where such service is offered
F&O Trading Futures and Options Broker Trading Account Bank Account OR 3 in 1 (Bank, Trading, and Demat) Accounts where such service is offered
PMS Listed Securities SEBI registered Portfolio Manager or Broker who is SEBI registered Portfolio Manager Trading and Demat Account Bank Account
Non-resident Indian NRE PIS Listed Securities Investor Trading and Demat Account Not required, but preferred by Broker 1. Designated NRE Account to record entries relating to secondary Purchase and Sale
2. NRE Account for all other entries
3. Demat Account if Bank is also a Depository Participant
Non-resident Indian NRE PMS Listed Securities SEBI registered Portfolio Manager or Broker who is SEBI registered Portfolio Manager Trading Account Custody / Safekeeping Account + Demat Account 1 Bank Account
Foreign National - Natural Person FPI PMS Listed Securities SEBI registered Portfolio Manager or Broker who is SEBI registered Portfolio Manager Trading Account Custody / Safekeeping Account + Demat Account 1 Bank Account
Foreign National - Legal entity FPI PMS Listed Securities SEBI registered Portfolio Manager or Broker who is SEBI registered Portfolio Manager Trading Account Custody / Safekeeping Account + Demat Account 1 Bank Account
Foreign National - Natural Person FPI PIS Listed Securities + Futures & Options Investor Trading Account Custody / Safekeeping Account + Demat Account 1 INR Bank Account + 1 FCY Bank Account (which is optional)
Foreign National - Legal entity FPI PIS Listed Securities + Futures & Options Investor Trading Account Custody / Safekeeping Account + Demat Account 1 INR Bank Account + 1 FCY Bank Account (which is optional)
Foreign National - Natural Person FPI PMS Listed Securities + Futures & Options Investor Trading Account Custody / Safekeeping Account + Demat Account 1 INR Bank Account
Foreign National - Legal entity FPI PMS Listed Securities + Futures & Options Investor Trading Account Custody / Safekeeping Account + Demat Account 1 INR Bank Account



Portfolio Management Scheme ('PMS') - NRI (NRE and NRO accounts) / OCI


Yes.

All accounts will be opened in the name of the Primary Account holder within the Bank Account. Additionally, joint accounts (limited to a maximum of three holders) can be opened to replicate the Bank Account's account holders.

Yes.The Portfolio Manager might consent to the utilization of an NRO account held at any bank selected by the investor. Yet, the investor must ensure funding of the Portfolio Manager's 'designated Pool Account' whenever the need arises.

Yes. In this scenario, the Portfolio Manager may consent to linking with an NRO account held at an Investor's chosen bank. Yet, the Investor must fund the Portfolio Manager's 'designated Pool Account' whenever necessary.
The following conditions apply.
1. A single unique NRE PIS Bank Account will be maintained.

The bank's internal system generates sub/virtual accounts to manage entries associated with the Portfolio Scheme at the Portfolio Manager level.

2. Virtual Account statements / transaction details are shared with appropriate Portfolio Manager

3. Sum total of opening and closing balances of all virtual account which reconcile with opening and closing balance at the Account level

Note: Should an investor with an NRE Bank PIS Account at a bank without existing business arrangements with the Portfolio Manager seek their services, the investor may need to transfer this account to a bank where the Portfolio Manager operates, subject to approval from other Portfolio Managers. If this resolution isn't viable, the current Portfolio Manager might ask the investor to close the account, or the new Portfolio Manager might be unable to offer the PMS Product for various reasons.

When investing in a Portfolio Management Scheme (PMS), linking your Non-Resident External (NRE) PIS Bank Account becomes.
The following options are available to the investor:

1. Convert an existing NRE-non PIS Bank Account to an NRE PIS Bank Account, granted that the current NRE-non PIS Bank Account is maintained with a Bank partnered with the Portfolio Manager. If there's no arrangement, the Investor must open a new NRE-PIS Bank Account with a Bank associated with the Portfolio Manager..

2. Opens a new NRE PIS Bank Account with the Bank partnered with the Portfolio Manager

3. Opens a new NRE PIS Bank Account with the Bank partnered with the Portfolio Manager and transfers (or can transfer) funds from old NRE PIS Bank Account, subject to the conditions that
a) Investor provides documentary evidence that old NRE PIS Bank Account has been closed and b) Trading will be permitted only on fulfillment of the condition 'a'

Note: As the appointment of a Custodian is a mandatory prerequisite, although the account opening documents are signed by the account holder, the account's operations rely on the Power of Attorney granted by the account holder to the Custodian.

Yes. The investor has the following options.

1. The investor can repatriate the balance held in existing NRE PIS Bank Account to his/her overseas Bank account, subject to payment of taxes if any and completion of formalities prior to closing of this Bank Account .

2. The investor can transfer the balance held in existing NRE PIS Bank Account to the new NRE PIS Bank Account prior to closing of this Bank Account

The new NRE PIS Bank Account may receive funds through inward remittance and/or balance transfer from an existing NRE PIS Bank Account.

Yes, it's possible, but with conditions:

Portfolio Manager's Approval: The first step is to check if the Portfolio Manager allows such transfers under the specific PMS product you're considering. Not all PMS schemes accommodate this option.
Detailed Disclosure: If the transfer is permitted, you'll need to provide comprehensive information about each share you intend to transfer.



Portfolio Investment Scheme ('PIS') - NRIs who maintain NRE Accounts only


No, while not mandatory, certain Brokers might encourage investors to appoint a Custodian

The NRE PIS accounts will be established in the name of the Primary Account holder within the Bank Account. However, the trading and demat accounts must be compulsorily opened with the Broker.

The virtual accounts will be opened by the Bank if the NRI who has investment through PMS also wishes to invest through PIS

Yes.

Brokers reserve the right to decline onboarding and may request the investor to transfer the PIS account to their preferred Bank. These arrangements encompass the exchange of trade data, client opening and closing balances. The process outlined in the PMS section regarding opening new PIS accounts, closure/conversion of existing accounts, and transferring/repatriating balances will be applicable.

It's important to note that if an investor currently investing through PIS intends to invest via PMS, the list of Banks where the Portfolio Manager may have arrangements might differ or be limited.

Yes.

The specified NRE PIS accounts are exclusively used for managing debits and credits pertaining to secondary trades executed by the investor. All additional credits (such as dividends, interest, and other permitted credits) and debits (rights, IPO/FPO subscriptions, and other permitted debits) must be conducted through the NRE account held with the Investor's chosen Bank. The Broker is not involved nor does it hold influence over the investor in this regard.

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