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1. Who is a Non-Resident Indian (NRI)?
A Non- Resident Indian (NRI) means a ‘person resident outside India’
who is a citizen of India or is a ‘person of Indian origin’.
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2. Who is a ‘person resident outside India’?
Under the Foreign Exchange Management Act, 1999 (FEMA), a person
who is NOT a ‘person resident in India’, as defined under Section 2 (v) of the Act
is considered as a ‘person resident outside India’. The most important change in
definition (since FERA 1973) is that the citizenship of a person no longer has a
bearing in determination of residential status. Top
3. Who is a ‘person of Indian origin’ (PIO)?
‘Person of Indian Origin’ (PIO) means a citizen of any country
other than Bangladesh or Pakistan, if:
- A) That person at any time held Indian passport; or
- B) That person or either of his/her parents or any of his/her grandparents was a
citizen of India by virtue of the Constitution of India or the Citizenship Act,
1955; or
- C) The person is a spouse of an Indian citizen or a person referred to in sub-clause
(A) or (B).
Investment by PIO in Indian Securities is treated the same as the investment by
non-resident Indians and requires same approvals and enjoys the same exemptions.
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4. Where can an NRI/PIO open a demat account?
NNRI/PIO can open a Demat A/C with any Depository Participant (DP)
of NSDL/CDSL.( Angel Broking Ltd is a depository participant of CDSL).The NRI/PIO
needs to mention the type (‘NRI’ as compared to ‘Resident’) and the sub-type (‘Repatriable’
or ‘Non-Repatriable’) in the account opening form collected from the DP.
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5. What is the process for NRI to invest in Indian Capital Markets?
Following is the process for NRI to invest in Indian Capital
Markets
1. Open a bank account with a designated bank branch approved by RBI.
2. Apply for a general approval for investment in Indian Stock Market through the
bank branch.
3. Open a Demat A/C with a depository participant to act as registered holder of
securities.
4. Open account with registered Broking Firm to execute transactions.
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6. What is a P.I.S. Account?
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’ and ‘Person of Indian Origin’ 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.Top
7. How to apply for a P.I.S. Account?
The Client needs to apply for a general approval for investment
in Indian Stock Market through his designated bank branch, where he holds his NRE/NRO
account. The application is submitted to a designated branch of an authorized dealer
in India in the prescribed form. No permission is required from RBI.
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8. What is the distinction between NRE and NRO accounts?
Funds remitted from abroad or local funds, which can otherwise
be remitted abroad to the account holder, can be credited to NRE Accounts. Local
funds, which do not qualify for remittance outside India, are required to be credited
to NRO accounts. Top
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