The essential goal of earning money is eventually to let your money make more money! While there are numerous ways of multiplying one’s wealth, the traditional method that everyone turns to is the Stock Market! The equal-risk equal-gain opportunity stock trading markets offer, reels in investors from all corners.
Lately, stock trading is a popular investment avenue globally. As a consequence of the global pandemic, people are taking a serious look at secondary sources of income. Amongst them, is a budding generation that seemingly understands the power of compounding. The stock market is a long-term game. Make a bite-sized investment, let it simmer for a few years, and if done right, your money is growing sustainably with more-than-reasonable returns.
The Indian stock exchange market has been one of the best-performing markets in the last few years, climbing the ladder from being the 9th largest stock exchange in the world to the 8th largest in only a matter of two years. The national stock exchange stood at an index of 6,100 points at the beginning of the decade which has now climbed up to nearly 16,000 points in just 10 years. A recent report further stated that the number of active investors in the market has increased by a tremendous 14.2 million people in the financial year of 2021 alone.
The stock exchange in India is proving to be fruitful to most of its investors, a huge chunk of which reside in the country itself, but it is also fostering the growth of investors outside the country.
In many ways, Non-resident Indians (NRIs) have similar rights to resident Indians. However, since they are located abroad, they are required to go through a regulated framework that entails greater compliance and complexity. If you are an NRI and you wish to trade in the Indian stock market, you need to have a Demat account that allows you to trade in bonds, stocks, IPOs, mutual funds, and more.
As per the guidelines of the Reserve Bank of India (RBI), an NRI who wishes to invest in shares in India through a stock exchange needs to approach the designated branch of any authorized bank. Such a bank must be authorized by the RBI to administer the Portfolio Investment Scheme (PIS). Consequently, an NRI can open a Non-Resident External (NRE) or a Non-Resident Ordinary (NRO) account under the scheme for routing Investments.
NRIs can purchase and sell shares and convertible debentures of Indian companies on Stock Exchanges under the PIS. All sale/purchase transactions are to be routed through the designated branch. However, as per the latest guidelines, the PIS scheme is not required for NRO (Non-Resident Ordinary). These will be treated as investments by residents.
To trade in the stock market, NRIs require a total of 3 accounts: an NRI Savings account, an NRI Demat account, and an NRI trading account. Most banks now provide a 3-in-1 or a 2-in-one account scheme in which they club the three accounts into one for an easier process.
The NRI trading accounts are used to purchase and sell the stocks and shares which are then stored in the NRI Demat account in a virtual form. Most banks now provide a 3-in-1 or a 2-in-1 account scheme in which they club the three accounts into one for easier access.
Before opening an NRI trading account, all NRIs are required to obtain the Portfolio investment scheme (PIS) letter from the RBI before they apply for opening the NRI trading account.
To create an NRI trading account one must follow the listed steps:
All these documents shall be self-attested and notarized by the Indian embassy or any other competent authority.
In recent times, the Indian stock exchange is witnessing an unprecedented influx of people investing in its trade with a considerable proportion of it being NRIs. Through the provision of NRI trading accounts, authorities allow NRIs to invest and operate in Indian Stock Markets with relative ease. NRIs can also open trading account through the IIFL website or demat account app and begin their trading journey.
Yes, NRIs are allowed to invest in Exchange Traded Funds (ETFs) in India. They can invest on a repatriation basis as well as a non-repatriation basis.
Only a part of opening an NRI trading account can be completed online. The documents have to be sent to the bank on paper.
There are many full-service and discount stock brokers in India offering trading services to NRI. Each one of them has its own pros and cons. Investors must carefully pick which account to go through with.
IIFL Capital Services app, Kite, and Infini are some of the most reputed and easy-to-use trading platforms in India.
Yes, NRIs can open a joint NRI trading account, granted that both the investors are NRIs.
Even though NRIs are encouraged to open their NRI trading accounts. They still have some restrictions as opposed to investors who live in India. Such as having the drawback of not being able to participate in Intra-day or “Buy Today Sell Tomorrow” trading practice.
Another drawback for NRI Trading Account holders is that they can only invest in derivatives through a non-PIS NRO account. A non-PINS is an account for which the transactions are not reported to RBI. This account also takes care of selling all those shares which are not allowed under PINS.
IIFL Customer Care Number
(Gold/NCD/NBFC/Insurance/NPS)
1860-267-3000 / 7039-050-000
IIFL Capital Services Support WhatsApp Number
+91 9892691696
Download The App Now
Follow us on
2024, IIFL Capital Services Ltd. All Rights Reserved
IIFL Securities Limited - Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213,IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248
This Certificate Demonstrates That IIFL As An Organization Has Defined And Put In Place Best-Practice Information Security Processes.
Invest wise with Expert advice
