NRIs cant invest in stock market through normal trading account - only through PIS Route

Описание: NRIs cant invest in stock market through normal trading account - only through PIS Route

Non-Resident Indians (NRIs) are required to invest through the Portfolio Investment Scheme (PIS) route rather than using the standard investment route available to resident Indian citizens. The PIS is a designated scheme established by the Reserve Bank of India (RBI) to facilitate overseas investors in buying and selling shares and convertible debentures of Indian companies on recognized stock exchanges in India. This ensures proper regulatory compliance and monitoring of foreign investments into the Indian equity market.

For example, under this scheme, NRIs can open a PIS account with a designated bank branch that is authorized by the RBI. Through this account, they can invest in the Indian stock market while adhering to specific conditions and limits set by the RBI. This includes restrictions on the percentage of equity that NRIs can hold in a particular company, thereby safeguarding the interests of the domestic investors and maintaining a balanced market structure.

It's important to note that by using the PIS route, NRIs can benefit from streamlined reporting and repatriation processes, making it easier to manage their investments from abroad. This route is essential for maintaining the transparency and integrity of foreign investments within the Indian financial system.