Portfolio Investment Scheme (PIS)

The repatriation of the sale proceeds are allowed if the original purchase was made on repatriation basis and the sources of investment were from NRE/FCNR(B) account or by means of remittance from abroad. If the original purchase was made from NRO a/c then the sale proceeds are not repatriable.

Yes. Investment can be made on repatriation as well as non-repatriation basis. However, the investor will have to open NRE account as well as NRO account with the Designated Bank. The sale proceeds of non-repatriable investment can be collected in NRO A/c only.

As per recent RBI guidelines, NRI should have a separate bank account exclusively for PIS purposes.Transactions relating to their personal banking as well as on account of transactions relating to shares acquired other than under PIS including IPOs should be routed in a separate bank account not linked to PIS. Account/s can be joint.

NRI can appoint only one Designated Bank for the purpose of routing the transactions under PIS.

The shares/convertible debentures acquired under IPO need not be routed through Designated Bank as this does not come under PIS. Such transactions, if routed through designated bank, should be done in a separate bank account not linked to PIS.

No, as an NRI you can purchase shares in primary market on repatriable basis and application money can be paid through regular NRE SB Account or through inward remittance.

No, as an NRI you can purchase shares in primary market on non-repatriable basis and application money can be paid through regular NRE/ NRO SB Account or inward remittance.

No.

No.

The shares purchased through primary / secondary market as a resident will be held on non-repatriation basis. Once the customer becomes an NRI, these shares can be credited to NRO DEMAT Account. These shares can be sold in secondary market without PIS permission. The sale proceeds can be credited to NRO SB Account after payment of capital gain taxes.

Yes. It is the responsibility of the NRI to inform the change of status to the designated authorised dealer branch, through which the investor had made the investments in Portfolio Investment Scheme and the DP with whom he/she has opened the demat account. Subsequently, a new demat account in the resident status will have to be opened, securities should be transferred from the NRI demat account to resident account and then close the NRI demat account.

Shares purchased under PIS on stock exchange shall be sold on stock exchange only. Such Shares cannot be transferred by way of sale under private arrangement or by way of gift (except by NRIs to their relatives as defined in Section 6 of Companies Act, 1956 or to a charitable trust duly registered under the laws in India) to a person resident in India or outside India without prior approval of the Reserve Bank of India.

Yes. NRI can purchase upto a maximum of five percent of the paid up capital of a company and maximum of five percent of paid up value of each series of debentures. For the purpose of this ceiling investment in repatriable and non-repatriable will be clubbed. In addition to above NRIs collectively can hold upto a maximum of 10% of such holding or any higher percentage so permitted in respect of any particular company. Shares/debentures acquired through primary market are excluded for the purpose of above limits.

RBI notifies a list of companies where the ceiling limit has reached and where no fresh purchases can be made. This list is called watch list.
RBI also notifies a list called caution list notifying the names of companies whose NRI holdings has reached 2% below the ceiling limit. Any further purchases are allowed only by obtaining prior approval from RBI. Such approvals are issued by the RBI on first come first serve basis.
The Watch and Caution list is available on the RBI Website. List of caution/banned RBI script is available at http://www.rbi.org.in/scripts/BS_FiiUSer.aspx

The sales proceeds can be deposited after deduction of the applicable tax. A C.A certificate in the specified format needs to be submitted before crediting the sales proceeds in the account.

The orders need not be placed through the Designated Bank. Further, the reporting of the transaction shall be done to the Designated Bank on the same day of transaction along with original contract note. One needs to ensure that the payment and receipt of funds in settlement of such trade has to be routed through the Designated Bank account only.

No. NRI cannot sell without taking delivery of the shares/convertible debentures purchased. Short selling is not permitted under PIS.

NRI will have to off load such portion of the holding, which is in excess of the prescribed limit.

Yes. The Designated Bank will issue approval on receipt of prescribed form.

A NRI needs to submit the transaction details (contract notes) to the Authorised Dealer on daily basis.

Yes, It is mandatory for a NRI to route all secondary market transactions through his PIS designated account i.e For all purchase / sell of stocks in secondary market only the PIS designated account should be debited / credited.