Monday 19 June 2017

Everything you need to know about Portfolio investment Schemes

The portfolio investment scheme allows NRIs to invest in shares of Indian companies, in secondary market, on repatriation and non-repatriation basis through a registered stock broker on recognised stock exchange NRIs can invest in repatriation basis under the PIS 5% of the paid up value and capital of each series of debentures of Indian companies that are listed within the limits that are overall permissible and these are subject to compliance with Reserve Bank of India guidelines. The Non-Resident Indian customer has to take delivery of the shares purchased and give delivery of the shares sold.

If one wants to make an investment on the basis of repatriation, he would have to make it from the funds available through the inward remittance of foreign exchange banking channels that are the usual or out of the money that are held in the NRE or FCNR banks accounts that are maintained in India.

Below are enlisted some of the main characteristics of NRE Portfolio Investment Scheme

One cannot transfer the shares by way of sale under private arrangement that have been purchased by the NRIs on the stock exchange under PIS  or by way of gift  to a residential Indian or outside India without the prior approval of RBI

The NRIs have to open a Non-Resident Rupee (NRE), Passenger Information System (PIS) account  so that they can invest in the secondary market on repatriation basis NRO savings bank account will have to be made use of if any investments are to be made.  The NRI’s can maintain the NRE PIS account which is independent of NRE savings bank (SB) account for their other needs. To deduce the proceeds of the share sale. The PIS account will be used, and all these transactions will have to be reported to the Reserve Bank of India.

The NRIs cannot maintain multiple Portfolio Investment Schemes accounts  with various banks  Both the purchase and the sale contract notes  should be submitted by the NRI in original within one day or maximum 2 days  from the execution of the contract  to the designated branch  with whom the PIS account is maintained. The sole responsibility os on the NRI for the submission of the contract notes to the designated branch of the AD bank.

SBI offers the facility of opening NRE PIS account for its NRI customers who have a KYC compliant NRE Savings Bank (SB) account that the bank maintains . For new customers all these accounts can  be opened simultaneously. The PIS account is mapped to the NRE savings bank account that is being maintained with any of the SBI branches so that the customer is able to execute trades. The PIS account is used to be settling funds that have arisen out of sale and purchase transactions.

No comments:

Post a Comment