Fixed Deposit

NRI Services

India has turned into a splendid investment destination for Non Resident Indians and persons of Indian origin. A growing & robust economy, a strong Rupee and profitable companies have together ensured that investors get maximum returns from both equity and debt markets. A highly transparent and automated stock exchange and a resonant mutual fund industry have ensured that investments are liquid and transparent. Taking advantage of this environment and our proven experience in the market.
 
Service Offered (Non Resident Indians)
  • How NRI strategy would work. Investor opens an NRE account with the funds repatriated into India. 
  • Investor defines his investment goals. 
  • We design a mutual fund portfolio based on invest objectives .
  • Investor can give mandate letter making Mr. x  mandate holder to implement strategy without the loss of time and investor intervention or Investor can make one of his known persons mandate holder who can execute documents and sign cheques on his behalf.  
We monitor the performance and progress of portfolio on continuous basis and refine strategy if required and carry out portfolio rebalancing. 

We provide regular update of the portfolio to the investor. Investment in stocks and mutual funds is subject to market risks. Investors should read the offer documents carefully and consult their investment advisor before investing.
 

NRI Investment

Portfolio Investment in Shares/Debentures of Indian Companies and in Domestic Mutual Funds
Portfolio investments in shares/debentures by NRIs/OCBs are permitted only through designated branches of authorized dealers, preferably located at centers having stock exchanges. Authorized dealers should inform the names of such branches to Central Office of Reserve Bank and obtain approval. The Code number allotted by Reserve Bank should be quoted in all correspondence undertaken with Reserve Bank in this regard. Non-resident investors can also authorize Indian residents or stock exchange brokers as their agents in India to purchase/sell shares on their behalf under the schemes but all transactions should be routed through the designated branch of authorized dealer.
 
General Conditions for Purchase with Repatriation or Non-Repatriation rights
  • NRIs/OCBs will be permitted to make portfolio investment in shares/debentures (convertible and non-convertible) of Indian companies, with or without repatriation benefits provided the purchase is made through a stock exchange and also through designated branch of an authorized dealer. NRIs/OCBs are required to designate only one branch authorized by Reserve Bank for this purpose.  
  • Investment in equity shares and convertible debentures will be permitted subject to an overall ceiling of (a) 10 per cent of the total paid-up equity capital of the company concerned; and (b) 10 per cent of the total paid-up value of each series of the convertible debentures issued by the company concerned for all NRIs/OCBs taken together both on repatriation and on non-repatriation basis.
  • The purchase of shares and debentures under the scheme is required to be made at the ruling market price.
  • NRIs / OCBs intending to invest on non-repatriation basis should submit their applications in Form NRI / NRC respectively, through a designated branch of an authorized dealer, to Reserve Bank (Central Office). Reserve Bank will grant general permission to the concerned authorized dealer to purchase shares/debentures of Indian companies, securities (other than bearer securities) of the Central or any State Government and Treasury Bills on behalf of the NRI/OCB subject to the condition that the payment for such investment is received through inward remittance or from the investor's NRE/FCNR/NRO/NRSR account.   
  • The general permission granted by Reserve Bank would be initially valid for a period of five years. Authorized dealers may themselves renew the permission granted by Reserve Bank to individual NRIs as well as OCBs for a period of five years at a time.
  • NRIs and OCBs intending to invest with repatriation benefits should submit their applications through a designated branch of an authorized dealer in Form RPI / RPC respectively.
  • Reserve Bank will grant general permission to the designated branch for purchase of shares/debentures of Indian companies, securities (other than bearer securities) of the Central or any State Government and Treasury Bills, subject to the conditions that the payment is received through an inward remittance in foreign exchange or by debit to the investor's NRE/FCNR account. Investment made by any single NRI/OCB investor in equity/preference shares and convertible debentures of any listed Indian company should not exceed 5% of its total paid-up equity or preference capital or 5% of the total paid-up value of each series of convertible debentures issued by it and NRIs/OCBs take delivery of the shares/convertible debentures purchased and give delivery of the shares/convertible debentures sold under the Scheme.
  • The general permission granted by Reserve Bank will be valid initially for a period of five years. Authorized dealers may themselves renew the permission granted by Reserve Bank to individual NRIs as well as OCBs for a further period of five years at a time. Authorized dealers may note to obtain the latest OAC/OAC 1 certificate from the OCB concerned before renewing the permission.
NRIs/OCBs intending to invest in the units of domestic mutual funds on non-repatriation/repatriation basis under the Portfolio Investment Scheme should apply to Reserve Bank (Central Office) in the above manner. However, approvals already granted for portfolio investment in shares/debentures of Indian companies will also be valid for purchase of units of domestic mutual funds.

Investment in Joint Names
Shares/debentures purchased by NRIs/OCBs should be held and registered in the names of either the investor himself or an authorized dealer or the latter's nominee/s. Shares/debentures can be purchased by NRIs in joint names with other NRIs with permission of Reserve Bank. In such cases, if the investment is with repatriation benefits, the first holder is to be treated as investor for the purpose of 5% ceiling. The second or third holder will be eligible to invest separately in the same company in his own name as the first holder in joint holdings up to the limit of 5%. Reserve Bank will also permit investment jointly with residents. However, if the resident joint holder inherits the shares/debentures, he/she will not be entitled to repatriation benefits.

Sale / Transfer of Shares / Bonds / Debentures by NRIs to Residents
The Reserve Bank has granted general exemptions sale/transfer of shares/bonds/ debentures through stock exchanges in India subject to fulfillment of certain conditions. Applications for sale / transfer of shares / bonds /debentures held by NRIs/OCBs by private arrangement i.e. other than through stock exchange should be made to Reserve Bank in form TS 1 either by the transferor or the transferee, attaching therewith the letter of consent of the other party irrespective of whether the shares/bonds/ debentures are listed on a stock exchange or not. While conveying its approval, Reserve Bank will stipulate the conditions subject to which the sale/transfer should be effected. In cases of sale/transfer of shares/bonds/debentures acquired on repatriation basis, repatriation of such proceeds of bulk holdings (i.e. shares/bonds/debentures exceeding Rupees one lakh in face value or 5% of the company's paid-up capital whichever is lower) will be permitted only on production of a certificate from a Chartered Accountant or the concerned company's secretary stating that shares with necessary transfer forms duly signed have been received/lodged with the company for registration in favour of the transferee.

General Exemption for Sale/Transfer of Shares/Bonds
The Reserve Bank by its Notification No. FERA.149/93-RB dated 26th April 1993 has exempted the transfer of shares, bonds or debentures of Indian companies made by NRIs through stock exchange in India in case where :-

  • Such transfers are made in favour of an Indian citizen or person of Indian origin resident in India or in favour of a company or other body corporate incorporated in India and
  • Sale proceeds of shares are credited to the NRO account of the transferor with no right of repatriation outside India.
In such cases, authorized dealers may credit the sale proceeds to the seller's NRO account after verifying the contract notes issued by recognized stock exchange brokers through whom the sale was effected. This exemption is available in respect of shares, bonds or debentures acquired by NRIs under the Portfolio Investment Scheme as well as under any Direct Investment Scheme.

For sale/transfer of shares, bonds or debentures by OCBs acquired on non repatriation basis through a stock exchange in India, a consolidated application giving full particulars may be submitted to the concerned office of Reserve Bank. Permission will be granted by Reserve Bank for a specific period subject to renewal.

General Exemption for Sale/Transfer of Shares/Bonds/Debentures of Indian Companies through a Stock Exchange acquired with repatriation benefits under the Portfolio Investment Scheme.
The Reserve Bank by its Notification No.FERA.150/93-RB dated 26th April 1993 has exempted transfer of shares, bonds or debentures of Indian companies registered in India previously acquired by NRIs/OCBs with repatriation benefits under the Portfolio Investment Scheme to persons resident in India or persons of Indian origin resident in India or in favour of companies or bodies corporate, incorporated under any law in force in India if the following conditions are satisfied :-
  • The transferor had purchased such shares, bonds or debentures from the stock market through a member of a recognized stock exchange in India and delivery of shares, bonds or debentures so purchased has been taken by him or on his behalf by the concerned authorized dealer or its nominee.
  • The shares, bonds or debentures are sold in the stock market through a member of a recognized stock exchange in India and the sale transaction is effected at the ruling
  • market price as determined on the floor of the stock exchange by normal bid and offer method and through the same designated branch of the authorized dealer through which the shares, bonds or debentures were earlier purchased.
  • The sale proceeds are paid to the said designated branch.
Consequently, it is not necessary for NRIs/OCBs to obtain Reserve Bank's permission for sale of shares/bonds/debentures effected in the above manner. As regards the repatriation of sale proceeds received by the designated branches, Reserve Bank will, while granting approval for purchase of shares/bonds/debentures also grant approval for repatriation of the sale proceeds if and when shares/bonds/debentures are sold in the above manner. The actual repatriation of the sale proceeds or credit thereof to the NRE/FCNR account of the beneficiary will be subject to payment of Indian taxes.

Sale/transfer of shares/bonds/debentures acquired by NRIs/OCBs with repatriation benefits under the Direct Investment Scheme and sold through the Stock Exchange in India will require permission of Reserve Bank. Applications for necessary permission should be made by NRIs/OCBs to the Central Office of Reserve Bank in form TS 4 through the designated bank branch of an authorized dealer. In such cases, permission for sale/transfer of shares / bonds/ debentures acquired with the right of repatriation will be granted by Reserve Bank to the bank branch designated by the seller or to the authorized dealer, as the case may be, who may sell the holdings at the ruling market price through a stock exchange at any time within the validity of the permission.

While granting permission for sale/transfer, Reserve Bank will also authorize the designated branch/authorized dealer to credit the sale proceeds to the NRE or FCNR account of the seller or to remit them abroad subject to payment of taxes on capital gains, if any. Where the amount of capital gains tax is not immediately determinable, the designated branch/authorized dealer may allow repatriation of sale proceeds or credit thereof to the seller's NRE/FCNR account to the extent of the original cost of investment immediately on realization of the sale proceeds. The excess amount, if any, representing capital gain should be kept by the designated branch/authorized dealer in a separate NRO account of the seller or in a suspense account.

The designated branch/authorized dealer may allow withdrawal of this amount for credit to the NRE/FCNR account of the seller or remit it abroad, on production of necessary tax clearance certificate under Section 204 of the Income-tax Act 1961 and after deduction of income tax at source.

General exemption for transfer of rupee securities by non-residents as gift
By its Notification No. FERA.151/93-RB dated 26th April 1993, Reserve Bank has also exempted transfer, by way of gift, of any share, bond or debenture of a company registered in India made by a non-resident Indian or person of Indian origin to a citizen of India or a person of Indian origin resident in India provided :-

Such share, bond or debenture was held by the transferor with the permission of the Reserve Bank,

Such transfer is between relatives as defined in Section 6 of the Companies Act, 1956.

Transfer of Rupee Securities to Non-residents as Gifts
Transfer of rupee shares/securities by residents to non-residents by way of gift requires prior approval of Reserve Bank. Applications for such transfers should be made to the concerned Office of Reserve Bank and should, inter alia, contain the following information:-

  • Name, address and permanent place of residence of both the transferor and the transferee.
  • Relationship between the transfer or and the transferee.
  • Reason for making the gift.
 
Recording of Overseas Address by Indian Companies consequent on Resident Security Holder Becoming Non-resident
The Reserve Bank, by its Notification No. FERA 122/92-RB dated 17th September 1992, has granted general permission to companies in India to enter the overseas address in such cases provided the company obtains an undertaking from the holder of any security that he will not seek repatriation of any income, dividend or sale proceeds of the security. The dividend/interest earned on such securities or sale proceeds thereof should, therefore, be credited only to the Ordinary Non-resident Rupee (NRO) Account of the holder with a bank in India.

Conversion of Holdings of Securities into Joint Holdings Between Residents/Non-residents
The Reserve Bank, by its Notification No. FERA.145/93-RB dated 26th April 1993 has granted general permission to NRIs/resident Indian citizens for conversion of their holdings in securities issued or registered in India, into joint holdings by addition of the names of persons of Indian nationality or origin subject to the following conditions:-

(a) An NRI may convert his holding into joint holding by addition of name/s of person/s of Indian nationality/origin resident in India provided

(i) transfer formalities as required under the Companies Act, 1956 are complied with and
(ii) dividend income or sale proceeds of the securities accruing to the person resident in India are not repatriated outside India in the event of his becoming a non-resident sole (or joint named) holder of the security by succession, gift or otherwise.

(b) A resident Indian citizen may convert his holding into a joint holding by addition of name/s of an NRI/s provided

(i) the resident holder continues to be the first holder
(ii) the joint holding is treated as non-resident holding in the books of the company
(iii) any dividend or income or sale proceeds becoming payable to NRIs are credited to his NRO account and
(iv) the securities are not sold or disposed of otherwise than through a member of a recognized stock exchange in India, except with the permission of Reserve Bank
   
   

NRI FAQ's

Here's investing in Mutual Funds could prove to be a good financial decision:

An NRI is an Indian citizen who stays outside India.

  • a. For purposes of carrying out employment or any business or vocation.
  • b. Under circumstances indicating an intention to stay outside India for an uncertain duration.

Any Indian citizen deputed outside India for a temporary period in connection with employment.

A citizen of a foreign country (other than a citizen of Bangladesh or Pakistan) is a PIO if:

  • He/She at any time held an Indian Passport OR
  • He/She or either of his parents or any of his/her grandparents was a citizen of India OR

Spouse (not being a citizen of Bangladesh or Pakistan) of an Indian citizen (a) or (b) above.

NRI can invest in the following products.

  • Equity trading on BSE and NSE
  • Derivatives trading on the NSE
  • IPO online
  • Portfolio Management
  • Investments in Mutual Funds
  • 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 with an NBFC to hold his shares and register to execute his buy/sell orders on the stock exchange(s).

Any NRI/PIO can open two types of savings accounts with any bank in India. They are NRE and NRO bank accounts.

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 monies lying in NRE account can be taken outside the country or in other words, the monies 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.

A NRO bank account is an ordinary saving 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, monies lying in NRO account cannot be taken outside the country or in other words, the monies lying in NRO account are not repatriable.

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

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

RBI has advised banks to re-designate such accounts as resident accounts on return of the account holder to India.

As per section 6(5) of FEMA, NRI 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, but has to transfer the shares to his NRO (Non Resident Ordinary) account

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.

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.

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 (NRIs)' and 'Person of Indian Origin (PIOs)' 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. Any NRI or a PIO wanting to trade/make fresh investments in the Indian Equity Secondary Market needs and must have one PIS account with only one designated bank in India.

Notes:

  • PIS account is applicable only for NRIs and not for resident Indians.
  • It is only for trading in Indian markets and not any other foreign markets.
  • It is applicable only for equity trades and not MF investments.
  • There are two types of PIS account:
  • NRE PIS account
  • NRO PIS account

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.

NRI/PIO can open only one PIS account with any designated banks (Preferred bank – UTI Bank) in a prescribed format for PIS account, upon which the bank can issue a PIS approval letter to the investor.

No. Any investment done in secondary market should be routed through a PIS account. For other products the investment can be done through direct subscription route.

It is a normal savings bank account which can be opened with any bank in India. Non-PIS is an account for which the transactions are not reported to RBI. This account takes care of selling all those shares which are not allowed under PIS. Shares acquired under IPO or received as gift or bought as resident Indian can be sold under Non-PIS account.

  • There are two types of NON PIS account
  • NRE NON PIS account
  • NRO NON PIS account
  • Sale of shares which were acquired other than PIS.
  • Shares acquired through IPO's.
  • Gifts from relatives or otherwise.
  • Shares bought as resident Indian.
  • Fresh acquisition through IPO's.
  • Investment in Mutual Funds.

As per the regulations NRIs are allowed to invest up to a certain percentage of the total paid up capital of the company by directly subscribing to the equity/convertible debentures of the company either though a public offering made by the company or through private placements on one to one basis. Regulations provide for different ceilings on such investments based on the industry to which the company belongs and also the nature of investments (repatriation / non-repatriation basis).

No. Investments made by NRIs though subscription to Initial Public Offerings (IPO's) or Private placements are not covered by Portfolio Investment Scheme. Such investments are covered by RBI's regulations with regard to Foreign Direct Investments.

No. NRIs do not require any permission to invest though Initial Public Offerings (IPO's) or Private placements. In such cases, the Issuing Company should comply with all necessary regulations for issuing securities to a person resident outside India.

No. NRIs can sell such shares/debentures on the Exchange without any approval. However, while seeking the credit of sale proceeds to NRE/NRO account, the bank should be provided with the details regarding date of allotment and cost of acquisition to calculate the taxes, if any.

Yes. Investment can be made on repatriation as well as non-repatriation basis. However, an NRI will have to open NRE account as well as NRO account with designated bank branch as the sale proceeds of non-repatriation investment can only be credited to NRO account.

The repatriation of the sale proceeds, net of taxes, are allowed if the original purchase was made on repatriation basis and such investments were made out of funds from NRE/FCNR account or by means of remittance from abroad.

Corporate benefits may be in the form of dividend, interest, rights, bonus, etc. Any corporate benefit resulting out of investment in securities on non-repatriation basis will not carry the right of repatriation. Similarly any corporate benefit resulting out of investment in securities on repatriation basis will carry the right of repatriation. This is subject to change depending on prevailing RBI regulations.

NRI/PIO needs to open a demat account with an NBFC as explained above.

No. Securities received against investments under 'Foreign Direct Investment scheme (FDI)', 'Portfolio Investment scheme (PIS)' and 'Scheme for Investment' on non – repatriation basis have to be credited into separate demat accounts. Investment under PIS could be on repatriation or non – repatriation basis. Investment under FDI scheme is on repatriation.

Client submits a DRF form along with the physical share certificate to NBFC, who in turn forwards it to the Registrar & Transfer agent for confirmation from the company. After the confirmation is received the client a/c is credited.

As per regulatory guidelines, Tax (if applicable) has to be deducted at source for all the profits done in the equity market transactions. Before crediting sales proceeds it is the responsibility of the broker and the PIS cell to determine the appropriate Tax and deduct it at source.

TDS rate is different as per the tenure of the investment. It can be classified into

Long-term capital gain – If the period of holding is more than 1 year i.e. the difference between the date of purchase and sell is more than 1 year, then the TDS rate applicable is 0 %. Before 1st Oct 2004 this rate was 10% now it is tax-free.

Short-term capital gain - If the period of holding is less than 1 year i.e. the difference between the date of purchase and sell is less than 1 year, then the TDS rate applicable is 10%. Before 1st Oct 2004 this rate was 30%.

TDS is computed on the profit amount or the gain as per the applicable rate i.e. short term or long term on a First-In, First-Out (FIFO) basis.

For any TDS to be deducted and money to be remitted to bank account, there are three things which have to be verified.

  • Amount of gain = Selling price – Purchase price
  • Duration of holding i.e. long term or short term = Selling date – Purchase date
  • Source of fund for purchase i.e. NRE or NRO

Important: TDS is deducted only at the time of crediting sales proceeds.

Portfolio Management Services provides the benefits of diversification across assets, sectors, and funds. The experts in Portfolio Management combine best of breed investment of avenues as they aim to achieve optimal returns at managed levels of risk. It is transparent collective investments.

A mutual fund is nothing more than a collection of stocks and/or bonds. You can make money from a mutual fund in three ways:

  • Income is earned from dividends on stocks and interest on bonds. A fund pays out nearly all income it receives over the year to fund owners in the form of a distribution.
  • If the fund sells securities that have increased in price, the fund has a capital Gain. Most funds also pass on these gains to investors in a distribution.
  • If fund holdings increase in price but are not sold by the fund manager, the fund's shares increase in price. You can then sell your mutual fund shares for a profit.

You can invest in Mutual Funds through NON PIS account.

Equity investments are subject to market risks and there is no assurance or guarantee that the objective of the portfolio management service will be achieved. As with any investment in securities, the net asset value of the managed portfolios can go up or down depending on the factors and forces affecting capital markets. Past performance of the portfolios does not indicate the future performance.

International Equity division provides an opportunity for investors to scale up their investment horizon, by tapping into International Equity and Commodities markets.