NRI Investment Terminology
FCNR: Foreign Currency Non-Resident Account. It is maintained
in foreign Currency viz., US Dollar (USD), Pounds Sterling (GBP), Euro
Currency (EUR) and Japanese Yen (JPY), but only as fixed deposits.The
Principal and Interest earned thereon are repatriable.
NRE Bank Account: Non-Resident External Account.
Maintained in Indian Rupees, both in the form of savings bank and fixed
deposit. Principal and Interest earned thereon are repatriable
NRO Bank Account: Non-Resident Ordinary Account.
Maintained in Indian Rupees, both in the form of savings bank and fixed
deposit. Taxable under Indian Income Tax. Principal is not repatriable
whereas interest earned thereon is repatriable, after payment of applicable
taxes. Best suited for NRIs who have some sort of income accruing in
India viz., Rental income, dividend etc. Can be maintained jointly with
a resident Indian.
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)
FAQs for NRIs
What is the classification of NRIs? How do I know if I classify
Non- Resident Indian means a person resident outside India
who is a citizen of India or is aperson of Indian origin 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. E.g a citizen of India who is a residing in the US or other country
under work permit would also be considered as an NRI
Person of Indian Origin (PIO) means a citizen of any country
other than Bangladesh or Pakistan, if he at any time held Indian passport;
or he or either of his parents or any of his grandparents was a citizen
of India by virtue of the Constitution of India or the Citizenship Act,
1955; or 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.
Can NRIs invest in shares, debentures and units of mutual funds
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 I apply for IPOs? if YES, then How?
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.
What is a PIS account? Do I need it to start trading in the Indian
Under this scheme, NRIs are permitted to acquire shares/debentures
of Indian companies or units of domestic mutual funds through the stock
exchange(s) in India. Investment can be made both on repatriation or
non-repatriation basis. For making investment on
repatriation basis, it will be necessary to make payments by way of
inward remittance or by debit to the NRE / FCNR account of the NRI /
PIO. Investment on non-repatriation basis can also be made by way of
inward remittance or by debit to the NRE / FCNR / NRO accounts. The
sale proceeds of the repatriable investments can be credited to the
NRE / NRO accounts of the NRI / PIO at the option of the investor, whereas
the sale proceeds of non-repatriable investment can be credited only
to NRO accounts.
In case the nature of investment cannot be verified, the status of
the scrip will have to be
ascertained by referral to RBI. The sale of shares will be subject to
payment of applicable taxes.
How do I apply for PIS?
The application is to be submitted to a designated branch of an authorised
dealer in India in the prescribed form.
Reserve Bank has authorised a few branches of each authorised 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
authorised dealer branches who have authorisation from Reserve Bank.
The banks Authorised to accept PIS applications are HDFC, UTI, ICICI
If I already have a NRE/NRO account, then how
do I apply for a PIS account?
If you have a NRE/NRO account with any of the above named authorized
dealers, then all you need to do is submit an application form for a
If you however have a NRE/NRO account with a bank other than the above
named banks, you will need to approach any of the above names banks
and provide them details of your account and then apply for the PIS
How do I make payments and receive payments?
Whenever a client executes a Buy/Sell Trade in any of the exchanges,
a bill for the same is
generated from our side (a copy of the bill is sent to the client by
email). This bill is then presented to the respective bank of the client
by Investmentor Securities Ltd. The bank verifies the clients account
number and status and issues or accepts the cheque for the amount of
What about tax implications of my income/investments in India?
Most banks these days provide CA facilities for NRIs who prepare
the end-of-year statements for their clients based on the transactions
of the clients in their PIS and Bank Accounts.
The Tax applicable for NRIs are different than those applicable
for Resident Indians. You can get a summary of these from a local CA.
Is it safe & reliable to invest with InvestMentor
InvestmentorOnline has placed proper security measures like SSL
certificate, Firewalls, Proxy IPs and a DMZ (Di Militarized Zone)
to ensure complete safety of data from the client to the server to the
corresponding exchanges. The broadcast rates come directly from the
exchange and are real-time which ensures reliability of the rates and
All this is very complicated, Where and How do I begin from?
Please follow our guidelines for opening an account to help you
guide through the process by clicking here.
How do I open a demat/trading account?
Please follow our guidelines for opening an account to help you guide
through the process by clicking here
How do I open a NRE/NRO Bank account?
Click here for details and forms for opening a NRE/NRO account with
UTI bank or HDFC bank.
If I already have an NRE/NRO account with some bank and/or in some
can I retain it and still open a demat and trading account with you?
You can keep the NRE/NRO account with any bank as long as it is
located in the city where we have one of our branches. This more than
anything else facilitates the process of cheque deposit and withdrawl
based on your transactions. Your Trading and Demat Accounts are independent
of your Bank Account. It is however necessary to mention your NRE/NRO
bank account number in your Demat and Trading A/c Forms
If I already have a demat account with some other DP, can I still
open a Trading
Account with you?
As per InvestMentor Securities Ltds rules and guidelines,
all clients who open a Trading Account with ISL need to have a Demat
Account with ISL. A client can continue to keep his/her Demat Account
with another DP, but will have to open a new Demat Account with ISL.
In case a person who is resident in India becomes a non-resident,
be required to change the status of his/her holding from Resident to
NRIs 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
How do I get to know my balance and statement of Accounts?
For your NRE/NRO bank account, the respective bank will provide you
with your online user id and password through which you can monitor
and carry out online trasactions through the bank.
For your account with ISL, we would provide you with our own user i.d
through which you would be able to monitor your Demat Account as well
as Trading Account.
You would be able take advantage of the following features
Check your bills online and save them
Get a summary of your trades
Get a complete statement of account for all three exchanges
Get a profit/loss report of your trading account
Check your Demat holding online
And plenty more
What is a PAN card? Is it compulsory to have a PAN card if I am
Permanent Account Number (PAN) card is issued to anybody who pays
or will have to pay taxes in due time in India. As per the new rules
and guidelines, even NRIs are required to have a PAN card
How do I apply for a PAN card?
To know about how you can apply for a PAN card check out our guidelines
for opening an account by clicking here