NON-RESIDENT INDIANS - PORTFOLIO INVESTMENT SCHEME
Portfolio Investment Scheme (PIS) allows NRIs to invest in shares of Indian companies, in secondary market, under repatriation or non-repatriation basis in respect of shares or convertible debentures sold or purchased through a registered stock broker on a recognized stock exchange.
For this purpose, NRIs can approach, PNB’s any of the following branches, authorized by RBI for administering the Portfolio Investment Scheme, for permission to open NRE/NRO account under PIS:-
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S. No.
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Name of Branch
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Code allotted by RBI
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1
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PNB House, Fort, Mumbai – 400 001
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4401
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2
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ECE House, K.G.Marg, New Delhi-110 001
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4402
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3
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Brabourne Road, Kolkata
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4403
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Investments by NRIs
NRIs can invest on repatriation and non-repatriation basis under PIS route upto 5% of the paid up capital / paid up value of each series of debentures of listed Indian companies, within overall permissible limits, subject to compliance of RBI guidelines, which may change from time to time. The NRI investor has to take delivery of the shares purchased and give delivery of shares sold.
On Repatriation basis
The investment on repatriation basis has to be made by way of funds from inward remittance of foreign exchange through normal banking channels or out of funds held in NRE/FCNR account maintained in India.
On Non-repatriation basis
The investment shares on non-repatriation basis, can additionally be made by utilizing funds in NRO account.
Restrictions about Sale/Transfer
Shares purchased by NRIs on the stock exchange under PIS cannot be transferred by way of sale under private arrangement or by way of gift to a person resident in India or outside India without prior approval of RBI.
Opening of Account under PIS
NRI to open separate PIS account (NRE/NRO) for the purpose of investments in secondary market on repatriation & non-repatriation basis respectively apart from maintaining savings NRE/NRO account.
NRI to authorize the Bank to debit their SF account under NRE/NRO for transfer of funds to their PIS account as and when required, towards purchase of shares through secondary market and for recovery of Bank charges etc. Bank will issue Pay Order/Draft in favour of the Broker authorized by NRI, based on the contract note submitted by them to the debit of PIS account.
Procedure for opening of PIS Account
The following documents are required to be submitted for opening of PIS account with PNB’s designated branches.
PIS (NRE) Account
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Application for PIS
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Letter of Authority for operating the account ;
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Acceptance of Fee Schedule for PIS;
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Form RPI (with Repatriation benefits);
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Annexure-I (For shares purchased through Primary Market as NRI on Repatriable basis) ;
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Nomination Form ‘DA-1’.
PIS (NRO) Account
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Application for PIS
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Letter of Authority for operating the account ;
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Acceptance of Fee Schedule for PIS;
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Form NPI (without Repatriation benefits)
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Annexure-II (Shares purchased as NRI through Primary Market on non-repatriation basis) ;
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Annexure-III (Shares purchased through Primary/Secondary Market during resident status/received in inheritance) ;
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Nomination Form ‘DA-1’.
NRI to provide copy of Power of Attorney given to the Registered Broker for undertaking sale/purchase of shares on his behalf to the designated Branch.
Issue of Authorisation Letter
After completion of formalities & opening of PIS account, Branch will issue a letter to the NRI conveying permission of the Bank to undertake Sale / Purchase of shares from the secondary market under PIS through a Broker registered with Stock Exchange. Branch will allot an authorization No. in the letter i.e. Name of Branch/code allotted by RBI for PIS/Sr.No./Year (e.g. ECE House/4402/1/ 2008).