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1. Demat account opening:
NRIs can open a
demat account with any Depositary Participant of NSDL/CDSL in
India.
The NRI needs to mention the type (‘NRI’ as compared to ‘Resident’) and the
sub-type (‘Repatriable or
‘Non-Repatriable’) in the account opening form. There
is a new category of NRI Accounts recently introduced,
as ‘DR’ Account, which is used for the purpose of 2 Way
Fungibility in GDR/ADR.
2. NRIs and RBI
Permissions:
No permission is required from RBI to open a
demat account. Holding securities in demat only constitutes change in form and does not need any special
permission. However, the RBI Permission is required by
the DP to receive shares purchased from the
secondary markets.
3. 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.
4. How does NRI dematerialise
securities purchased while he/she was
resident?
As per FEMA rules, NRI must regularize his/her
holdings to reflect change of status – in this case bring them to
‘Non-Resident’ status. For
this, NRI must submit (if not already submitted
to the issuing company earlier) a letter addressed to the issuing company along
with the Demat Request Form stating change of
status and giving
details
of foreign address.
5. What are the
procedures to be followed in respect of investment in securities in
case person resident in India becomes NRI?
On becoming an NRI, a new depositary account
with appropriate NRI status is to be opened and all the
balances held in account with
‘Resident status should be transferred to the
account with NRI status.
6. What are the procedures to be
to followed in respect of investment in
securities in case NRI
becomes person resident in India
?
On becoming an Indian resident, a new
depository account with appropriate status -
'Resident' in this case is to be opened and all the balances held in account with
'Non-Resident' status should be transferred
to 'Resident' status.
7. Subscribing to new issues:
The issuing company is required to issue shares
to NRIs on the basis of specific or
general permission from GoI/RBI. Therefore, individual
NRI need not obtain any
permission. However, the NRI must carefully
read the new issue application form
before making required purchases. In other words, the NRI can
purchase the
shares
even if the NRI does not have the RBI Permission.
8. Does NRI require any
permission to subscribe to Rights issue of a
company?
No.
9. Does NRI require any permission
to receive bonus shares?
No.
10. Can a NRl
nominate or be nominated in depository account? Whether such
nominee can be person resident in
India?
Yes.
11.Can an NRI and person resident in India have
a joint demat account?
Yes. For the purpose of determining ownership
of holding, the first holder is taken
into account. Hence, even though other joint holders maybe persons resident
in India, the sale proceeds of such securities can be
repatriated in case the first
holder is permitted to repatriate funds.
12. What are the permissions required for
off-market transfer of securities?
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From NRI to NRI |
- No permission |
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From person resident Outside India to
person resident in India (Gift) |
- No permission
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From person resident in India to person
resident Outside India ( Gift) |
- Application to RBI by transferor |
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From person resident in
India to person resident if outside India (Sale) |
- Approval from GoI and then RBI, if the
acquisation is on repatriable basis. But acquisation is on
non-repatriable basis, approval only from RBI |
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From person resident Outside India to
person Resident in India (Sale) |
- RBI Permission through form Ts1 |
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