NRI Corner

1. Who is an NRI?
According to the Reserve Bank of India, an Indian citizen who stays abroad for employment/carrying on business or vocation outside India or stays abroad under circumstances indicating an intention for an uncertain period to stay abroad is a non resident. Any Indian citizen deputed outside India for a temporary period in connection with employment are also treated as non-residents.

2. What steps an NRI needs to take to start investing in the Indian Stock Market?
An NRI should open a new bank account (NRE/NRO or both) with designated bank which is approved by RBI (Reserve Bank of India) for this purpose. He should apply for a general approval for investment in Indian Stock Market through his designated bank branch. He should open a Demat Account to hold his shares and a trading account to execute his buy/sell orders on the stock exchange(s).

3. What type of saving bank account(s) can be opened by an NRI or PIO In India?
Any NRI/PIO can open two types of savings accounts with any bank in India. They are NRE and NRO bank accounts.

4. What is a NRE account?
A NRE bank account is an external saving bank account opened for Non resident Indians. This is why it is known as Non-Resident External account. Since it is an external account, any money lying in NRE account can be taken outside the country or in other words, the money lying in NRE account are fully repatriable. This money can be converted into any foreign currency at the behest of the account holder and can be remitted outside the country.

5. What is a NRO account?
A NRO bank account is an ordinary savings bank account opened for Non Resident Indians. This is why it is known as Non-Resident Ordinary account. Since it is an ordinary account i.e. as good as a normal saving bank account, money lying in NRO account cannot be taken outside the country or in other words, the money lying in NRO account are not repatriable.

6. Can money be transferred from NRE account to NRO account?
Yes money can be freely transferred from NRE account to NRO account.

7. Can money be transferred from NRO account to NRE account?
No, money cannot be transferred from NRO account to NRE account.

8. What is PIS?
Portfolio Investment Scheme 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 Indian s (NRIs) and Person of India Origin (PIOs)’ can purchase and sell shares and convertible debentures of Indian Companies on a recognized stoch exchange in India by routing all such purchase /sale transactions through their account held with a Designated Bank Branch. Any NRI have or a PIO wanting to trade/make fresh investments in the India Equity Secondary Market needs and must have one PIS account with only one designated bank in India.

9. What are the types PIS account?
There are two types of PIS account:

§ NRE PIS account
§ NRO PIS account

10. Why is PIS required?

For all the Indian companies or companies listed on Indian stock exchanges, there are certain limits which have to be monitored under FEMA regulations. For any company the foreign investment into that company cannot cross certain limit. This limit is different from company to company and sector to sector. Also individually any NRI or a PIO cannot invest more than 5% in any Indian company.

11. How many PIS account can a NRI open?
NRI/PIO can open only one PIS account with any designated banks in a prescribed format for PIS account, upon which the bank can issue a PIS approval letter to the investor.

12. Where can an NRI/PIO open a demat account?
NRI/PIO needs to open a demat account with Eastern Financiers Limited

13. What are the additional documents required for NRI to open a demat account with Eastern Financiers Limited?
The additional documents required for NRI to open a demat account are as follows:
§ Proof of foreign address and Indian address (if any)
§ Proof of address of the contact person in India
§ For NRI accounts without repatriation benefits, address in India and proof thereof is mandatory.
§ Bank account details.
14. What is the requirement on change of status of NRI?
It is the responsibility of NRI account holders to inform to the DP the change in his/ her status as NRI to Resident. The DP should open a new account with the status of the BO as Resident. Holdings in the existing account should then be transferred to the new account. The old account should then be closed.

15. What are the additional documents required for NRI to open a trading account with Eastern Financiers Ltd.?
The additional documents required for NRI to open a trading account are as follows:

§ Proof of foreign address and Indian address (if any)
§ Proof of address of the contact person in India
§ Copy of complete passport.
§ Copy of PAN Card.
§ PIS Bank account details.
§ Copy of proof of NRE/NRO account