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Portfoilo Investment Scheme

Features & Benefits

Portfolio Investment Scheme facilitates purchase /sale of shares/convertible debentures by NRIs through stock exchanges in a hassle free manner.

 

  1. NRIs have to obtain permission for investments in the shares/convertible debentures through stock exchanges. RBI has delegated Banks to receive application and issue permission to NRIs to start investment. Our Bank is authorized to issue the permissions. Request for permission is included in the account opening forms. While Opening the account, DPS will issue permission to the customer.
  2.  NRIs have to open separate NRE PIS account for repatriable investments. The accounts are in the form of SB accounts. The operations in the account are exclusively for stock market operations. No cheque books are issued in the account. Transfer/Withdrawal from PIS accounts will have to be done with the prior approval of DPS.
  3.  Apart from NRE PIS accounts, Trading Account with broker and DP account with our bank or broker has to be opened. 
  4.  NRI has to give orders for purchase/sale of shares to the broker. Broker will purchase/sell the shares and the contract note will be presented to the bank. Bank will make payment/receive payment for the transactions executed by the NRI through the broker. NRI has to give authorization to the bank for operating the account
  5.  DP account will be debited/credited by bank/ broker as per authorization of the NRI
  6.  Bank will issue daily statement of transactions to NRIs.
  7. On sale of investments, tax on capital gains if any will be deducted and remitted to IT Dept by the Bank. Bank will issue TDS certificate to the customer for the same. As per the current rules TDS of following rates are applicable on capital gains. 
  8. Short Term Capital Gain (STCG) - 15.6%
  9. Long Term Capital Gain (LTCG) - 10.4%
  10. Daily mandatory reporting to RBI regarding the transactions will be undertaken by the bank.
  11. Regulatory compliance as to the limits up to which the investments can be made by NRIs will be ensured by the bank.
  12. Statement of Holding of PIS securities will be issued to the customer on request
  13. Facility to view DP account and NRE PIS account through Fed Net will be offered by the bank on customer request
  14. Dedicated Team to attend queries at DPS and Rep Office Team overseas is available

 

Get Assistance

 

For more details, please contact PIS Division of Federal Bank

PIS Division I Federal Towers I Marine Drive I Ernakulam I Kerala 682031

Contact numbers: 91 484 2385582 /2385505  

Email:  pis@federalbank.co.in

Transactions Covered

Permitted Transactions

  • Equity Share and Convertible Debentures purchased from secondary market.
  • Shares acquired by split

Excluded Transactions

  • IPO
  • Bonus
  • Rights
  • ESOPs
  • Shares acquired on conversion of ADRs/GDRs
  • Shares acquired under Direct Investment Schemes
  • Shares purchased outside India from other NRI/OCB
  • Mutual Funds
  • Insurance investments

Permissible Credits

  • Inward remittance in foreign exchange through normal banking channels
  • Transfer from applicant's other NRE accounts or  FCNR(B) accounts or NRO accounts maintained with banks in India
  • Net sale proceeds (after payment of applicable taxes) of shares and convertible debentures which were acquired on repatriation basis(for NRI PIS) and non repatriation basis(for NRO PIS) and sold on stock exchanges through registered brokers.
  • Dividend or income earned on investments under PIS.

Permissible Debits

  • Outward remittances of dividend or income earned.
  • Amount paid on account of purchase of shares and convertible debentures on repatriation basis or non repatriation basis on stock exchanges through registered broker under PIS.
  • Any charges on account of sale/purchase of shares or convertible debentures under PIS.

FAQs

  1. What is Portfolio Investment Scheme (PIS) to NRIs?

RBI has allowed NRIs to invest in shares/ convertible debentures of listed Indian companies in recognized stock exchanges under Portfolio Investment Scheme ( PIS) through Authorised Dealer Category I banks.

  1. Can NRIs invest both on repatriation and non-repatriation basis and how?

Investments can be made on repatriation or non-repatriation basis. For investments under repatriation basis, a separate NRE SB PIS account is opened by remittance from overseas/NRE/FCNR account. If the investments are on non-repatriation basis, NRO SB account is to be opened by remittance from overseas/NRE/FCNR /Local sources.

  1. In case the NRI is already having NRE/NRO account, is it necessary to open another NRE / NRO account for PIS?

Existing NRO SB can be used for non repatriable investments but separate NRE SB PIS for repatriable investments have to be opened exclusively for the PIS transactions. No cheque books are issued in the account. Separate request for withdrawal/transfer/closure of the account is to be given.

  1. What are the formalities for opening PIS account for investments?

NRIs have to open NRE SB PIS for repatriable and NRO SB for non repatriable investments. A Trading Account with a recognized broker has to be opened and DP account with the bank or broker shall be opened. Separate DP accounts have to be opened for repatriable and non repatriable investments.

Documents required for opening NRE PIS/NRO SB with the Bank

  • Photo signed across
  • Copy of Passport, VISA and PAN Card
  • Proof of Address abroad (Any of these- Driving Licence, Utility Bill, Residence Permit issued by Govt., Credit Card Bills, Rent Receipt, Bank Statement)
  • Self-attested Copies of documents should be attested by the Indian Embassy / Notary Public / Bank Manager.

Documents required for opening Demant Account

  • Photo signed across
  • Self-attested copy of Local address proof
  • Self-attested copy of Passport, VISA and PAN Card
  • Self-attested Proof of Address abroad (Any of these- Driving Licence, Utility Bill, Residence Permit issued by Govt, Rent Receipt, and Bank Statement)
  • Cancelled cheque leaf of NRE/NRO account
  • FEMA declaration

Documents required for opening Trading Accounts with Broker

  • Photo signed across
  • Self-attested copy of Address proof
  • Self-attested copy of Passport, VISA and PAN Card
  • Bank statement showing applicants name
  • Client Master List from DP
  1. Is it permitted for an NRI to have more than one bank as a designated bank for his PIS transactions?

No. NRIs have to deal with one bank only for PIS

  1. Can NRIs do day trading?

No. NRIs have to take delivery of the shares and give delivery of the shares. No short selling is allowed.

  1. Can NRIs undertake futures/options traded in Exchanges?

Yes. NRIs can execute futures/options etc. which are traded in the Stock Exchanges on non-repatriation basis (through NRO SB PIS A/c.) only subject to SEBI approved limits.

  1. Is there any limit for investments?

Investments on repatriation /non repatriation shall be up to 5 % of the paid up capital of the company for a single NRI. Aggregate Investments by all NRIs cannot exceed 10 % of the paid up capital of the company. The aggregate Investments can be up to 24 % if the general body of the Indian company passes a special resolution to that effect. This limit is monitored by RBI on a daily basis and advises Banks if the limit is reached so that further investments shall not be allowed.

  1. When a resident Indian becomes a non-resident, is it required to change the status of holding from Resident to Non-Resident?

As per section 6(5) of FEMA, NRI can continue to hold the securities which he/she had purchased as a resident Indian, even after he/she has become a non-resident Indian, on a non-repatriable basis

  1. When a non-resident Indian becomes a resident in India, is it required changing the status of holding from Non-Resident to Resident?

Yes. NRI has to inform the change of status to the designated authorised dealer branch, through which the investor had made the investments in Portfolio Investment Scheme and 

The DP with whom he/she has opened the demat account. Subsequently, a new demat account in the resident status will have to be opened, securities should be transferred from the NRI demat account to resident account and then close the NRI demat account.

  1. Does the NRI require permission to purchase securities by subscribing to public issue?

NRI/NRO can purchase shares under IPO if the issuing company is issuing shares to NRI on the basis of specific or general permission from GoI/RBI. Therefore, individual NRI need not obtain any permission.

  1. If the NRI acquire shares in Primary market both on repatriation and non-repatriation basis, should the sale proceeds of such holdings have to be routed through PIS account with the Designated Bank?

No. The shares/convertible debentures purchased in Primary Market under IPO need not be routed through the Designated Bank Branch since this does not come under PIS.

  1. What is the current arrangement Federal Bank has with broking firms?

Federal Bank has tied up with reputed broking firms for offering PIS to NRIs. Brokers have presence in GCC. NRIs can place orders with Brokers which will be executed by them. Payments for Purchase and receipts for sales will be undertaken by Federal Bank. The DP account will be operated by bank /Broker under Power of Attorney issued by NRI. As such, NRIs need to place orders only which will be executed by the Broker and all other procedures are undertaken by the Bank.

  1. What are the tax implications of investments now?

If sold within one year of purchase, short term capital gains will be deducted from the sale proceeds and LTCG will be deducted on sale of shares held more than one year. TDS certificate will be issued by the bank to the NRI for the tax deducted.

Rates & Charges

Minimum Balance in the account can be Nil (AQB). Transaction Charge (Rs.100+GST) per segment for Purchase and sale transactions separately will be charged to the account. AMC for PIS is Rs.1000+GST/-

Explore Other NRI Services

RBI Norms on NRI PIS Scheme

RBI Norms on NRI PIS Scheme
  1. NRIs have to open separate PIS accounts with an Authorised Dealer Bank exclusively for purchase/sale of shares through stock exchanges. NRIs can open PIS account with one bank only. 
  2. NRIs can buy shares up to the RBI prescribed limits in a company i.e., up to 5 % of the paid up capital of the company for a single NRI and 10 % for all NRIs put together. In other words NRIs can purchase up to a maximum of five percent of the paid up capital of a company and maximum of five percent of paid up value of each series of debentures under repatriation basis. In addition to the above, NRIs can hold up to a maximum of 10% of such holding or any higher percentage, so permitted in respect of any particular company. Shares/ debentures acquired through primary market are excluded for the purpose of above limits.
  3. The investments can be repatriable and non repatriable

PIS Tieups

Our Tie-Ups
 

We have tied up with various brokers for administering PIS. NRIs in the GCC have access to offices of these brokers. NRIs can issue orders for purchase/sale to corresponding Brokers who will execute the same. The Bank will make payments for the purchase and receive amounts for sale of investments in the NRE/NRO PIS accounts as per the contract notes issued by the Broker. The DP account will be operated by the Bank or Broker as per authorization given by NRIs. As such, NRIs need to issue the orders. The remaining procedures are done by Broker/ bank.

 

  • Geojit Financial Services Limited.
  • India Infoline limited.
  • Doha Brokerage & Financial Services limited.
  • Kotak Securities Ltd.
  • Philip Capital (India) Pvt Ltd
  • Fortune Wealth Management Company India (P) Ltd
  • Hedge Equities
  • Celebrus
  • UAE Exchange and Finance Limited
  • Pentad Securities Pvt Ltd

How to Invest in Shares in India

How to Invest in Shares in India
 

Are you an NRI who wants to trade on a recognized Indian stock exchange? Then, it is important for you to open and maintain an NRO/NRE and a PIS account for trading and for repatriation.

PIS - Portfolio investment scheme is a scheme introduced by the Reserve bank of India. All the NRIs can only have one PIS account with any designated bank branch and the main objective of this account is to have secondary market transactions. The NRI investment schemes enable the NRIs to purchase or sell shares and debentures on a recognized stock exchange/ market by the transactions through their NRI Savings account rather than trading through brokers.

The main advantage of investing in shares or debentures is the potential capital gains that can grow in value over time, income from the dividends and lower tax rates on long-term capital gains. Opening a PIS account and investing in share is a major investment idea as it can offer the highest returns in a short-term period.

Investing in a company's shares means you own a part of that company. The share market is a huge ocean of options for NRI investment in India. When it comes to investing, we want to grow our money with the highest rates.

An intelligent investment is worth it. While there are no shortcuts to getting rich, there are smart ways to go about it – Invest in shares!

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