FEFI · FOREIGNEXCHA

INVESTMENT OPPORTUNITIES TO NRIs

Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Foreign Exchange Facilities for Individuals — Foreign Exchange Facilities for Individuals.

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What does NRI stand for in the context of foreign exchange regulations in India?

NRI stands for Non-Resident Indian, referring to an Indian citizen or person of Indian origin who resides outside India for employment, business, or other purposes indicating an indefinite stay abroad.

Can NRIs invest in Indian company deposits (NCDs) on a repatriation basis?

Yes, NRIs can invest in NCDs on repatriation basis with RBI approval.

Which accounts are NRIs permitted to open in India for investment purposes?

NRIs are permitted to open NRE (Non-Resident External), NRO (Non-Resident Ordinary), and FCNR(B) (Foreign Currency Non-Resident Bank) accounts in India for investment and remittance purposes.

What type of bank account must NRIs use to route PIS transactions?

NRIs must route PIS transactions through a designated NRE or NRO bank account.

Are funds held in NRE accounts freely repatriable outside India?

Yes, funds held in NRE accounts are fully and freely repatriable, meaning both principal and interest can be remitted abroad without any restriction under FEMA.

Are NRIs allowed to invest in Indian company bonds listed on stock exchanges?

Yes, NRIs can invest in listed bonds of Indian companies.

Can NRIs invest in shares and securities of Indian companies listed on stock exchanges?

Yes, NRIs can invest in shares and convertible debentures of Indian companies listed on recognized stock exchanges under the Portfolio Investment Scheme (PIS) through a designated bank branch.

What is the ceiling on NRI investment in an Indian company under PIS on a non-repatriation basis?

The ceiling is 10% of paid-up capital on non-repatriation basis under PIS.

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