As an NRI, Banks are permitted to open/maintain the following Bank Accounts:

• 1. Non-resident External or NRE Bank Accounts.
• 2. Non-resident Ordinary or NRO Bank Accounts.

If an account holder is maintaining a Resident Bank account (single or joint) prior to him/her becoming NRI, the account holder can covert the existing Bank Account by contacting the Bank for conversion of Resident Account to NRO account by completion of formalities.

As stated earlier An OCI cardholder is a PIO.

Person of Indian Origin (PIOs) are permitted to open and maintain these accounts with authorised dealers and with banks (including cooperative banks) authorised by the Reserve Bank to maintain such accounts.

Account type / Residential Status

Account Type / Status	Resident Account	NRO	NRE
NRI	Not-permitted	Permitted	Permitted
PIO	Not-permitted	Permitted	Permitted
OCI	Permitted in certain cases	Permitted	Permitted

Note: There are some conditions applicable as to a) who can be eligible to be a joint account holder to such accounts b) Citizens of some countries who are barred from opening accounts etc. Account holders are requested to approach their Bank who will guide them with regard to applicability, if any in this regard.

Similarities:

• • NRE and NRO accounts are Indian Rupee accounts.
• • NRE and NRO accounts can be opened as Savings as well as Current accounts.

Key Differences

NRE accounts	NRO accounts
Balance freely repatriable. Account is tax free from interest earned on balances perspective	Balances repatriable up to INR equivalent of USD 1 Mio per financial year, net of applicable taxes
Permitted credits include a) Inward remittances from outside India b) Income earned on investments made through the NRE Account including maturity value/proceeds c) Transfer from other NRE account	Permitted to credit income originating in India such as salary, rent, interest, dividend etc

• • For NRI: PAN Card.
• • For OCI: OCI Card and PAN Card.

Service Providers may assist by informally recommending professional firms who can assist NRIs/OCIs in this regard. The investor is expected to approach such professional firms for professional and engage them.

In India, listed securities are shares, debentures, or any other securities that are traded through an exchange. Listing means the admission of securities of a company for trading on a stock exchange.

From NRI/PIO/OCI investor perspective, securities are held in dematerialized form in the account of the Investor opened and maintained with any of the Depository Participant of investor’s choice for any of the two depositories National Securities Depository Limited or Central Depository Services (India) Limited.

Yes.

Yes. Broadly there are two investment routes available for NRIs and OCIs.

PIS: Non-Resident Indians (NRIs), and Persons of Indian Origin (PIOs) are allowed to invest in the primary and secondary capital markets in India through the portfolio investment scheme (PIS), a scheme of Reserve Bank of India. Under this scheme, NRIs can acquire and trade shares/debentures of Indian companies through the stock exchanges in India. Conditions apply with regard to repatriation / non repatriation as well as percentage investment threshold in the paid-up share capital of the listed company. Banks who offer PIS as a product may charge the investor for such services and may differ from Bank to Bank.

PMS: Portfolio Management Schemes as a product is offered by many a Brokerage firms, investment advisory firms, wealth management firms as well as Banks who are registered with SEBI for such a product offering, act as Portfolio Manager. This product is offered to the investor class who desire to invest in Indian equity market but do not have either the time or expertise to manage the portfolio themselves. There are two types of PMS offered:

• • Discretionary PMS: In this type, the Portfolio Manager independently manages the funds of investors according to their investment objectives
• • Non-discretionary PMS: In this type, the Portfolio Manager manages the portfolio solely on the direction of the investor.

Portfolio Managers who are governed by SEBI Regulations often offer different Schemes/Product Plans to potential investor to suit investment strategy, investment objective, risk profile / appetite etc.

Investor is required to pay fees / charges to Portfolio Manager in the form of a) Fixed Charge calculated as a percentage of value/average value of the portfolio over a period/billing period agreed and/or b) Performance-lined charges calculated as a percentage of profit or a fixed amount charged on excess return generated over specified return.

Yes. All Bank, Demat, Trading, Portfolio Accounts are mandatory required to be opened in the name of the Investor. Consequently all securities bought under PMS or PIS Schemes will be held and traded in the name of Investor in an account which will be identified by a unique number.

Yes.

Depending on the residential status and investment route, Investor will be required to appoint any/all of the following service providers who are regulated by SEBI and/or RBI:

• • Bank.
• • Bank – Custodian.
• • Non-bank – Custodian.
• • Depository Participant.
• • Broker – Trading Member of Stock Exchange.
• • Portfolio Manager.

Selection of service provider is a sole responsibility of the investor. It should be noted that Service Providers do have arrangements with other service providers and the products are offered by disclosing the names of other service providers which are preferred.

Each of the Service provider may charge the investor for services/products offered.

We provide below the key role of each of the Service Providers:

Bank: Open and maintain the Bank Accounts for NRE/PIO/OCI and monitor permissible credits and debits depending upon the nature and objective of the account opened. Banks are regulated by Reserve Bank of India.

Bank – Custodian / Non-bank – Custodian: Custodian of Securities means any service provider (which could be a Bank or not a Bank) who is in the business of providing custodial services and is registered under Securities and Exchange Board of India (Custodian) Regulations, 1996. Custodians will typically open and maintain Custody/Safekeeping Accounts for investors to reflect security balances acquired/traded by the investor and will also offer value added services in the form of bespoke reports.

Depository Participants: Or a DP is an agent of the two Depositories in Inda viz. NSDL and CDSL. DPs governed by SEBI, act as intermediaries between a depository and investor facilitating the trading, transfer of ownership and settlement process. DPs open and maintain Demat Accounts in the name of Investors.

Broker – Trading Member of Stock Exchange: All brokers are members of Exchange and are regulated by a specific SEBI Regulation(s). Exchanges offer four types of memberships viz.

• a) Trading Member execute trades on his own account as well as on account of his clients but clearing and settlement of trades done through a Trading-cum Clearing Member or Professional Clearing Member.
• b) Trading cum Self Clearing Member execute trades and to clear and settle the trades executed on his own account as well as on account of his clients.
• c) Trading cum Clearing Member execute trades executes the trade on his own account as well as on account of his clients and to clear and settle trades executed by themselves as well as by other trading members who choose to use clearing services.
• d) Professional Clearing Member (Custodians, for example) clears and settle trades of such members of the Exchange who choose to clear and settle their trades through this member.

Portfolio Manager: A portfolio manager is a body corporate which takes responsibility for management or administration of a portfolio of securities or the client’s funds. Portfolio managers are registered and regulated under specific SEBI Regulations.

Service Providers, if eligible under applicable regulations may offer some or all of Services mentioned above to investors as a composite Product and/or Service.

From Service Providers’ perspective.

Each of the Service Providers will subject the investor to the following stages:

1. • KYC Procedures.
2. • On-boarding.
3. • In-person Verification (IPV).
4. • Account Opening.

These stages will require the investor will have to provide documents, information as well as in-person verification through physical/electronic means as stipulated by SEBI and/or RBI. While procedure and documentation/information requirement will be similar across service providers, each service provider may have some additional documentation/information requirement which will need to be complied with.

** In-person verification (IPV) is a mandatory process for all intermediaries (i.e. Brokers, Custodians, Portfolio Managers) to establish the individual's identity. Only the IPV performed by a SEBI-approved intermediary will be taken into consideration. Some Service Providers may stipulate certain Investors domiciled in certain jurisdictions (eg. US based NRI) to be physically present in India for execution of documentation.

From Investor perspective:

1. • Chooses the investor status / investor eligibility – i.e. NRE, NRO, OCI, FPI etc.
2. • Chooses the invest route viz. PIS and/or PMS.
3. • Chooses the Service Provider(s).
4. • Chooses the Scheme / Product(s) offered by the Service Provider.
5. • Subjects to KYC and account opening documentation of the Service Provider.

No.

No. Except a foreign national (who is not a NRI or OCI) wishes to invest as a Foreign Portfolio Investor.

Yes.

All accounts will be opened in the name of Primary Account holder in the Bank Account. It can also be opened in the joint names (upto 3 holders only) to mirror account holders of the Bank Account.

Yes. In such an event Portfolio Manager may agrees to NRO account maintained with any Bank of Investor’s choice. However, the Investor is required to fund Portfolio Manager’s ‘designated Pool Account’ as and when such requirement arises.

Yes. In this situation, some Banks (where the Portfolio Manager has business arrangements) offer ‘virtual account structure’ which works in the following way.

1. Only one NRE PIS Bank Account having unique account number will be maintained.
2. Bank’s system internally opens sub/virtual accounts to account for entries pertaining to Portfolio Scheme at Portfolio Manager level.
3. Virtual Account statements / transaction details are shared with appropriate Portfolio Manager.
4. Sum total of opening and closing balances of all virtual account with reconcile with opening and closing balance at the Account level.

Note: If any investor having NRE Bank PIS Account with a Bank with whom Portfolio Manager does not have business arrangements approaches Portfolio Manager, investor has no choice but to shift such NRE Bank PIS Account to such a Bank provided other Portfolio Manager(s) agree/approve. If this solution is not feasible for whatever reason, existing Portfolio Manager may request the Investor to close the account or the new Portfolio Manager may not be in the position to provide PMS Product.

Any investment through PMS Scheme is to be mandatory linked to NRE PIS Bank Account. Thus, Investor has the following choices:

1. Covert existing NRE-non PIS Bank Account to NRE PIS Bank Account, provided existing NRE-non PIS Bank Account is maintained with the Bank with whom Portfolio Manager has business arrangements. If the Portfolio Manager has no business arrangement, then Investor has no option but to open a new NRE-PIS Bank account with the Bank with whom Portfolio Manager has business arrangement.

2. Opens a new NRE PIS Bank Account with the Bank with whom Portfolio Manager has business arrangement.

3. Opens a new NRE PIS Bank Account with the Bank with whom Portfolio Manager has business arrangement and transfers (or can transfer) funds from old NRE PIS Bank Account, subject to the conditions that a) investor provides an documentary evidence that old NRE PIS Bank Account has been closed and b) trading will be permitted only on fulfillment of the condition ‘a’.

Note: Given that appointment of Custodian is mandatory requirement, while account opening documents are executed by the account holder, the account is operated on the basis of PoA granted by account holder to Custodian.

Yes. The investor has the following choices:

1. The investor can repatriate the balance held in existing NRE PIS Bank Account to his/her overseas Bank account, subject to payment of taxes if any and completion of formalities prior to closing of this Bank Account.

2. The investor can transfer the balance held in existing NRE PIS Bank Account to the new NRE PIS Bank Account prior to closing of this Bank Account.

Consequently, the new NRE PIS Bank Account can be either funded by an inward remittance and/or balance transfer from existing NRE PIS Bank Account.

Yes. if the Portfolio Manager permits such transfer as part of the PMS Product which is being offered. However, the investor is mandatorily required to provide / disclose the full details of acquisition for each of the share quantity transferred, prior to such a transfer and completion of certain formalities required by Portfolio Manager.

No. But some Brokers may prefer the investor to appoint the Custodian.

All accounts NRE PIS will be opened in the name of Primary Account holder in the Bank Account. But trading and demat account will be mandatorily required to be opened with Broker.

The virtual accounts will be opened by the Bank if NRI who has investment through PMS also wishes to invest through PIS.

Yes. Brokers may refuse to onboard and would expect the investor to transfer PIS account to the preferred Bank. The arrangements include exchange of trade data and opening and closing balances of client. Procedure stated in PMS section with regard to opening of new PIS account and closure/conversion of existing PIS account including transfer/repatriation of balances will apply.

It should be noted that the investor who has investment through PIS wishes to invest through PMS, the list of Banks with whom Portfolio Manager may have arrangement may be different or the list may be short.

Yes. The designated NRE PIS accounts are solely maintained for debits and credits relating to secondary trades undertaken by investor. All other credits (dividends, interest, other permitted credits etc) and debits (rights, IPO/FPO subscriptions, other permitted debits etc) should be through NRE account maintained with the Bank of Investor’s choice. Broker has no role to play nor will influence the investor.