Terms To Know

Non Resident External Bank Account (NRE)
- You can transfer foreign currency from overseas Bank account to NRE Bank account.
- Non-resident External Account (NRE) is a bank account where both the principal and the interest earned can be taken back to your country means funds can be repatriated.
- Demat Account mapped with NRE Bank account is called as NRI-Repatriable Demat Account.
Non Resident Ordinary Bank Account (NRO)
- Money kept in this account can not be taken back to your country. This is Non-repatriable Bank Account.
- You can use this account for funds originating in India such as rent, dividends, pension etc.
- RBI has allowed repatriation of funds from NRO account up to 1 Million USD every financial year.
- Demat Account mapped with NRO Bank account is called an NRI-Non Repatraible Demat Account.
Portfolio Investment Scheme (PIS)
- Fresh purchase from the secondary market as an NRI.
- Sale of shares bought under PIS.
- PIS does not allow transactions in IPOs, Mutual Funds, Derivatives.
Non Portfolio Investment Scheme (NON- PIS)
- Preference Shares
- Non Convertible Debentures (NCD) and Bonds
FATCA / CRS
- Foreign Account Tax Compliance Act (FATCA) is a legislation introduced by the Unites States of America (USA) Department of Treasury and Internal Revenue Service (IRS) to prevent US persons from evasion of tax.
- Common Reporting Standards (CRS) is to aid automated exchange of information between Bilateral Treaty partner countries about account holders / investors maintaining account in foreign jurisdictions.
- For FATCA and RS, agreements signed by Government of India which obliges banks and financial institutions to report information about such account holders (having other country's indicia) to tax authorities.

TRADING PROCESS FOR CASH SEGMENT

Trading Account with HDFC PIS Bank

Allocate funds to HDFC PIS A/c
Login to Sharekhan A/c
Visit Homepage
Go to Move Funds
Block the amount to trade
Sharekhan connects you to HDFC PIS A/c
Confirm amount on HDFC website
Limit gets added to Sharekhan A/c. Start Trading

Trading Account with Axis / Indusland /IDBI Bank

Allocate funds to your Axis/Indusland PIS A/c
Banks share PIS Balance file with Sharekhan
We update PIS balance in Trading limit
Log into Sharekhan A/c & start trading

SETTLEMENT PROCEDURE

In India, settlement cycle is of T+2 day. Under PIS guidelines, NRI Trades needs to be reported to PIS Bank within 24 hours of Trades.

Trades are reported to PIS Bank
For buy Bank debits PIS A/c and make payment
Funds are debited from PIS A/c on T+1 evening
For sale Bank credits PIS A/c Net TDS
Sale proceeds are credited to PIS A/c on T+2 day evening

TRADING PROCESS FOR DERIVATIVES TRADING

Login to Sharekhan NRO NON PIS Account
Visit homepage - go to Move Funds option
Select Bank Account & Transfer Funds
Limit updated - start trading
Futures & Options trading is possible through NRO NON PIS account.
NRO bank account is mapped with this trading account.
Exchange allots CP code for NRI FNO trades. All NRI FNO orders are sent to exchange with CP code

POINTS TO REMEMBER

Only Delivery based transactions are allowed in Cash Segment. No Intra-day trading is allowed in cash segment.
Intraday, Short sale, buy today sell tomorrow (BTST) trading not allowed.
100% Funds need to be available in account while buying the shares, no exposure is allowed.
An NRI can deal with only one bank at any point of time. PIS (Portfolio Investment Scheme) approval can be issued by only one bank.
NRI will be allowed to invest only up to 5 % of the paid up capital of the company individually. NRIs are NOT allowed to buy certain scrips under this regulation. Report of the same is available on the RBI website.
For Non-PIS sale transactions like sale of IPO share, resident status shares, declaration in specified format has to be submitted to Bank.
For Bonds, NCDs, preference shares payment need to be made through NRE/NRO SB account.