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NRI FAQs

 

INVESTING WITH ARIHANT

What are the products offered to NRI / PIO by Arihant?

We offer you the following products for investment:

  • Investments in equities under PIS on BSE and NSE
  • Derivatives trading on the NSE
  • IPO Investment
  • Portfolio Management Services
  • Investments in Mutual Funds

We at Arihant, backed with in-depth research, are committed to create value for you. Your growth is our objective.   

Do you have a research team?

We have a strong research team comprising of fundamental and technical analysts. Research is at the forefront of our business. Whatever investment advice we deliver is based on a thorough understanding of the company, the industry and the markets.

We track around 40 companies and have regular management meets and concalls. With Arihant you can rest assured that you get the right investment advice.

Do you offer online trading service? Do you have online IPO facility?

i-Trade, Arihant’s online trading service offers you a powerful platform to trade in Indian equities. You can invest in securities listed on NSE and BSE through i-Trade. We offer two powerful online trading platforms for investors and traders. To know more about our online trading service click here.

For IPO investment, we provide online IPO facility, so you do not need to fill-in lengthy application forms and send. You can log in to your account and just select the IPO you wish to invest along with quantity and the rest we manage for you.

How do you service your NRI client?

We appoint a dedicated relationship manager for you who is your one point of contact. (S)He will provide you all the help and assistance you need to make investments, whether directly in equities or through our HNI services.

We have online trading facility and online access to all your statement and accounts, so that you can place your trades or check your account – anytime anywhere.

For IPO investment, we also provide online IPO facility, so you do not need to fill-in lengthy application forms and send. You can log in to your account and just select the IPO you wish to invest along with quantity and the rest we manage for you.

How do I invest in Mutual Funds through Arihant?

Arihant has an exclusive mutual fund desk that will take care of all your investment needs. Your relationship manager will help you with the investment – from selecting the right scheme, to making the investment, to making sure you get your statements and dividends dividends on time and finally helping you with the redemption process. Click here to know more about our mutual fund service.

We also have a mutual fund research team that does thorough analysis of mutual fund schemes and provides investment recommendation based on different investor profile. Different people have different risk profile, investment horizon and financial goals. After careful analysis of different investor profiles, we come out with recommendations based on your profile and financial goals.

How can I research and keep track of my investments?

Stock prices and Mutual Fund prices are quoted in the newspapers and on the Internet. They are also available on websites of most Mutual Funds and research agencies.

You can go to the News and Markets section to view the updated stock prices and Mutual Fund NAVs. Arihant’s Online Backoffice Center provides you myriad reports through which you can get the value of your equity portfolio, updated every day.

In order to maximise the money you invest, it is necessary to review your investment portfolio on a regular basis. You may want to re-look at your investments to account for changing goals, fresh investment avenues, changing market dynamics etc. It is possible that some investments you are holding are not performing to your expectations. If that is the case, you may consider revising your portfolio. You can use Arihant’s Advisory Services for advice and management of your portfolio.

GETTING STARTED

I am an investor and I want to invest in Indian stocks. Can I invest in India?

You can invest in Indian stocks if you fall under the following:

  • Indian citizens and residents - FULLY OPEN: Currently Indian capital markets are FULLY open for investments for residents of India - individuals and institutions.
  • Non-resident Indians (NRIs), persons of Indian Origin (PIOs) - PARTIALLY OPEN: NRIs, PIO and corporate bodies controlled by NRIs/PIOs can also invest in Indian stocks and bonds, SUBJECT to permission from Reserve Bank of India RBI (Federal Reserve of USA equivalent body of Indian government) and SEBI (SEC equivalent regulating body in India).
  • Foreign Institutional Investors (FIIs): Few years back, India opened its doors to FIIs for investment. So if you are representing an investment institution in USA, UK or any part of the world, you can register your firm with RBI/SEBI, and subject to current regulations, you can invest/trade in Indian stocks on Indian stock exchanges.
  • Foreign citizen - CLOSED/UN-INVESTABLE: If you are a foreign born individual investor whose parents or grandparents were never part of India, Indian Capital Markets are closed for you for direct investment. Indian rupee is still controlled by Indian government for Capital account transactions. This means, resident Indian nationals are not allowed to invest in overseas stocks and likewise, foreign nationals cannot invest in Indian markets.

Who is a NRI (Non Resident Indian)?

A NRI is an Indian citizen who stays outside India

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

The term also includes an Indian citizen deputed outside India for a temporary period in connection with employment.

I am an NRI and now I am thinking to invest in Indian stocks. How can I get started?

Following is a good outline for investing in India in the secondary market through a stock broker:

Step-1: Getting the Permission

Reserve Bank
You can invest in India with or without repatriation benefits. Repatriation means you can take your money including profit back to your country in the currency you desire, say Dollars, Pounds, Yen.

1. With Repatriation: (under Portfolio Scheme): Fill up RPI (for NRIs) or RPC (for OCBs) forms and file it with Reserve Bank of India. It is much better now. The permission is almost automatic plus you will not need to file any other form with RBI. Permission you get will be valid for five years. Click here to download form RPI /RPC.
2. Without Repatriation: (under Portfolio Scheme): Fill up NRI (for NRIs) or NRC (for OCBs) forms and file it with Reserve Bank of India. This one form will take care of almost everything. Things would be pretty easy not only for you but also for your broker, bank or anyone. Click here to download form NRI / NRC.

Income Tax:
Fill up this form and get the Tax Id (Permanent Account Number- PAN) from Income Tax department.

Step-2: Opening Accounts

You need to open three different types of accounts.

1. Bank Accounts. This will hold your money balances.
2. Brokerage Account: This is for placing buy/sell orders. You can open your account with Arihant. We are a SEBI registered stock broker with leading stock exchanges of India. At Arihant, we will offer you wide array of financial products with complete research support. About us
3. Depository Account: This will hold your stocks and securities. You can open your account with ARIHANT. We are a SEBI registered Depository Participant (DP) with NSDL (National Securities Depository Ltd.) and CDSL (Central Depository Services of India Ltd).

Step-3: Now make your investment or start trading online.

1. Place, view, modify or cancel your orders anytime you want.
2. Once a trade is executed, transfer fund/securities from your bank account/depository account to our beneficiary account. We will settle your trades with clearing corporation on the Settlement Day and your accounts would be deposited with fund if you sold stocks or with the securities if bought.

Under which main schemes can an NRI make investments in the Indian companies?
NRIs are allowed to invest under the:

Under which main schemes can an NRI make investments in the Indian companies?

coming

 

OPENING AN NRI ACCOUNT

Who can open a NRI account with Arihant?

Any Indian citizens who fall under the definition of NRI are eligible to open an account with Arihant.

How do I open a NRI Account with Arihant?

It’s simple. Just contact us with whichever mode is convenient to you and we shall get you started:

NRI Account

Make sure that you seek RBI permission and file all the necessary documents before opening an account.

What are the documents required for opening an account with Arihant?

Being an NRI, you need to provide the following documents to open an account with us along with the client registration form:

  • PAN CARD (compulsory)
  • Address proof of India (bank passbook/ passport / driving license, electricity/telephone bill)
  • Address proof of your foreign address
  • Bank Proof: Bank Verification letter indicating type of account as NRI/NRE/NRO and Bank Statement
  • Attested copy of Passport (Copy of Name, Address And Photo pages) and Visa 
  • Power of attorney as per format
  • Portfolio Investment Scheme (PIS) permission
  • 2 Passport size photographs

OPENING A BANK ACCOUNT

What type of saving bank account(s) can be opened by NRIs in India?

NRIs can maintain two types of account with any bank in India. They are:

  • Non-Resident (External) Rupee Accounts (NRE Accounts)
  • Ordinary Non-Resident Rupee Accounts (NRO Accounts)

What are the formalities required for opening a bank account?

It is preferable that NRI investors deal only with one designated bank branch under portfolio investment services. To open an account, an undertaking letter, the bank account opening form and the following annexure should be submitted:

  • Two photographs signed across
  • Copy of passport (first four pages and last page) and visa copy. These copies should be attested by the Bank Branch Manager (Overseas) / Notary Public / an official of the Indian Embassy in the country of residence
  • RPI form for repatriating the benefits or NRI form for non-repatriating the benefits

I already have a bank account in India. Can I do my transactions through this bank?

You can have as many NRI/NRO accounts in India but you should have only one designated bank for sale/purchase of shares under the Direct/Portfolio Investment Schemes. RBI guidelines permit NRI investors to designate only one bank authorized by RBI to undertake purchase/sale of shares/debentures through the stock exchange. The client has to give a declaration that he has not obtained RBI permission for sale/purchase of shares under the Direct/Portfolio Investment Schemes through any other bank.

What is the distinction between NRE and NRO accounts?

Funds remitted from abroad or local funds, which can otherwise be remitted abroad to the account holder, can be credited to NRE Accounts. Local funds, which do not qualify for remittance outside India, are required to be credited to NRO accounts.

Which banks offer NRI services?

DEMAT AND PAN CARD

What is a Pan Card? How do I get one?

Permanent Account Number (PAN) is a ten-digit alphanumeric number, issued in the form of a laminated card by the Income Tax Department. PAN card is compulsorily required if you wish to invest in Indian equities.

To acquire a PAN card, you have to submit an application in Form 49A for obtaining PAN card. To view/print copy of Form 49A, just click on the website link: www.incometaxindia.gov.in/Archive/Form49aE.PDF. This form can be submitted to UTI Investor Services Ltd, NSDL or Income Tax offices in India.

What is a Demat Account? What is a Depository and who is a Depository Participant?

A Demat account is one by which the investor is able to hold his securities in electronic form as beneficial owner through opening such account with a depository participant.

A depository holds the securities of investors in electronic form just like a bank holds cash for its customers. They serve as a link between the Shareholder, the Company and Broking Firm. The National Securities Depository Limited (NSDL) and Central Depository Services Ltd (CDSL) are the two depositories in India. The Securities and Exchange Board of India (SEBI) regulate their functions.

As a NRI/PIO, you can open demat accounts with one or more DPs. After opening the account, you can hold shares of any number of companies in your account, provided all such companies have entered the depository system.

Does an NRI need any RBI permission to open a Demat account?

There is no permission required from RBI to open a Demat account.

How to open Demat accounts?
You can open a demat account with Arihant by filling in the Demat Application Form and furnishing the requisite documents to open an account. We offer you depository facility with both the apex depositories of India NSDL/CDSL.
Documents required to open a demat account:

  • PAN CARD (compulsory)
  • Address proof of your Indian address. Any of the following:
    • Bank statement
    • Passport
    • driving license,
    • electricity / telephone bill (not more than 2 months old)
  • Address proof of your foreign address
  • Bank Proof: Bank Verification letter indicating type of account as NRI/NRE/NRO and Bank Statement
  • Attested copy of Passport (copy of name, address and photo pages) and Visa 
  • Power of attorney as per format
  • Declaration in the prescribed format or PIS approval copy (Portfolio Investment Scheme by Authorised Bank)
  • Savings Bank account has to be NRE/NRO/NRI as applicable
  • Type of account, repatriable or non-repatriable, to be indicated
  • 2 Passport size photographs

*While filling in your form please be careful while filling in your residential status (‘NRI’ as compared to ‘Resident’) and the sub-type (‘Repatriable or ‘Non-Repatriable’) in the account opening form.

Can securities purchased under Repatriable and non-Repatriable category be held in a single Demat account?

An NRI must open separate Demat accounts for holding ‘Repatriable’ and ‘non-Repatriable’ securities.

STARTING TO TRADE

Can I pay foreign currency into my account?

It is not possible for us to accept foreign currency cheques. To start to trade on NSE, BSE, MCX or NCDEX you will need to have a bank account in India.

You can open a NRI bank account and transfer funds from your overseas bank account to the Indian account and start investing through us.

Can I trade on margin?

As of now NRIs are allowed to do only delivery-based business and not on margins.

Can I square up my transaction in the same settlement?

As per the Regulations, NRI investors should take delivery of shares purchased and give delivery of shares sold which implies that for sell transaction you have to give delivery irrespective of the fact that the same shares have been bought by you in the same settlement cycle. For buy transaction, the stock would be credited to your Demat account independently.

As long as your sell transaction is backed by actual holdings in your Demat ccount and the buy transaction is validated against the trading limits available, you can do two independent buy and sell transactions in the same stock in the same settlement cycle.

A Can loss from one transaction be set off against gain from another transaction while calculating TDS?

As per the terms of Portfolio Investment Scheme, setting off losses against gains in not permitted. Bank will calculate TDS, wherever applicable, on every sale transaction independently.

Can Power of Attorney holder manage portfolio on behalf of NRIs?

Yes, a Power of Attorney holder can manage portfolio on behalf of NRIs. However, he cannot affect remittance outside India.

PIS (PORTFOLIO INVESTMENT SCHEME)

What is PIS?

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.

What are the salient features of PIS?

  • PIS account is applicable only for NRIs and not for resident Indians.
  • It is only for trading in Indian stock markets and not in any other foreign markets.
  • It is applicable only for secondary market equity trades and not for MF investments or IPO deals.

What is repatriation and non-repatriation?

  • Repatriation means taking invested money back home. It is the process of converting a foreign currency into the currency of one's own country.
  • Non -repatriation means the NRI cannot take the money invested in India.

Wherever the investments are allowed with repatriation benefits, the funds for the purpose should be received by inward remittances from abroad or from the investor's NRE/FCNR Accounts. However, in respect of investment on non repatriation basis, funds in NRO Accounts could also be used.

What is the procedure for making investments under the PIS scheme?

  • You (NRI) should open a PIS account with a designated bank branch, which is approved by the Reserve Bank of India, for this purpose. It is also advisable to maintain a NRE/ NRO bank account with the same designated branch for administrative convenience.
  • You should apply for RBI approval through your designated bank branch, for investment in Indian Stock Markets, by completing the prescribed forms. Reserve Bank issues general permission for a period of 5 years that can be renewed further.
  • You should open Demat Account/s with a Depository Participant to hold your shares. Separate Demat accounts have to be opened for maintaining Repatriable and non-Repatriable investments.
  • Payment for purchase of shares and / or debentures has to be made out of inward remittances / funds held in NRE / FCNR account maintained in India, if the shares have to be purchased on repatriation basis. The share can also be purchased on non-repatriation basis for which the investments can be made from inward remittances or out of funds held in NRE/FCNR/NRO account maintained in India.
  • The net sale proceeds (after payment of taxes) of shares and / or debentures can be remitted abroad or credited to your NRE/FCNR/NRO account if the shares and / or debentures were purchased on repatriation basis. Where the shares and / or debentures were purchased on non-repatriation basis, the sale proceeds can only be credited to the NRO account of the NRI.

What are the transactions covered under PIS?

For transactions to be covered under PIS, they need to satisfy two conditions:

  • They should be purchased from Indian Equity Secondary market; and
  • They should be purchased by you as an NRI

Thus, you are allowed to carry on the following transactions under PIS:

  • Fresh purchase from the secondary market as an NRI
  • Sale of shares, which were bought under PIS

The following transactions are not allowed or are not covered under PIS:

  • Sale of shares, which were not bought under PIS like: Gifts, subscription to IPOs or shares bought as resident Indian.
  • Fresh subscription for the IPOs as an NRI
  • Investment in Mutual Funds

Can income earned on Portfolio Investment be remitted abroad?

As an NRI, you can remit your income such as interest and dividend from your portfolio investments acquired whether on repatriation basis or on non- repatriation basis, provided you have paid applicable taxes. However capital gains can be repatriated only if investment is on Repatriable basis.

INVESTMENT THROUGH DIRECT SUBSCRIPTION ROUTE (IPOS)

Do investments made though IPOs or Private placements come under PIS?

Investments made by NRIs through subscription to initial public offerings (IPOs) or private placements are not covered by Portfolio Investment Scheme. Such investments are covered by RBI's regulations with regard to Foreign Direct Investments.

Do I need approvals from RBI for selling securities acquired through IPOs/Private Placement?

No you do not need approval. As a NRI, you can sell such shares/debentures on the Exchange without any approval. However, while seeking the credit of sale proceeds to your NRE/NRO account, the bank should be provided with the details regarding date of allotment and cost of acquisition to calculate your taxes, if any.

RESTRICTION AND PERMISSION

Is there any limit for purchase by NRIs under the PIS?

Yes, as a NRI you can purchase up to a maximum of 5% of the aggregate paid up capital of the company (equity as well as preference capital) or the aggregate paid up value of each series of convertible debentures as the case may be. For the purpose of this ceiling, investment under the Portfolio Investment Scheme on repatriation as well as non-repatriation basis will be clubbed together.

There is an overall ceiling of 10% of paid-up equity share capital of the company / paid-up value of each series of convertible debentures for purchase by all NRIs/OCBs put together. The overall ceiling can be raised if the company concerned passes a special resolution to that effect in its general body meeting.

Does NRI require any permission to subscribe to rights issue of a company or to receive bonus shares?

No, permission is required.

Are NRIs required to file any reports to RBI?

The NRI investor is not required to file any Return or Report with the RBI with regard to acquisition or sale of shares and/ or debentures in an Indian Company. The concerned office of the designated bank branch is required to furnish a report on daily basis on Portfolio Investment Scheme Transactions to RBI.

Can NRIs invest under Portfolio Investment Scheme out of funds borrowed in India?

NRIs cannot invest out of borrowed funds in India.

PASSWORD AND SECURITY

How do I get my User ID and Password for the first time?

Once your account gets activated, we will dispatch you a unique user ID and password, with which you will be able to access your account online. Our executive will guide you on how to check your account and trade details online. In our client welcome kit you will also receive a booklet that will give you all the information on the services you will get once you become an Arihant customer and also on how to access your account online.

What if I have forgotten my password?

If you have forgotten your password, you will need to post an online request for forget password link. Than it will ask certain information for security reasons which you have already know like your email id and your login id. We shall email you the same to your email address that you have registered with us.

How do I change my password?

You can change your password anytime by accessing your account and choosing Change Password from the menu.

How safe are my User Id and password?

You only know your User Id and Password, as these are stored in encrypted form with us.