NRIs and PIOs can open a demat account with any depository participant (DP). The NRI or PIO needs to mention the type and the sub-type (repatriable or nonrepatriable) in the account opening form collected from the DP. No permission is required from the Reserve Bank of India (RBI) to open a demat account. However, credits and debits from the demat account may require general or specific permissions as the case may be, from designated banks. Further, no special permission is required by a NRI for dematerialiation or rematerialisation of securities.From the comments and emails I have received, a lot of NRIs seem to believe they can only invest in mutual funds or through Portfolio Management Services. I was also under the same impression. Now that the air is clear, I hope more NRIs and PIOs will come forward and invest directly; after all, investing in India is vogue and direct investment is perhaps better than investing through a fund, if you know what you are doing.
Tell me if you have problems going down this route - I hope that there is at least one brokerage that will let NRIs trade through an online account, let's see which ones create issues.
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>Deepak,
Yes, NRIs have always had the ability to open Demat accounts and trade directly on Stocks. Some useful info for your NRI visitors:
- Capital gains will be deducted at “source” for NRIs. So when they redeem or cash in, they can expect this to be withheld.
- Only NRIs from the Gulf (I guess Dubai, Saudi etc) can open an online trading account. NRIs from any other region of the world still cannot trade online.
- NRIs, if they trade in stocks (or mutual funds I think) are required to file a tax return in India if they trade above a certain amount (This threshold is fairly low, so it may cover most people
- NRIs from US (and I think UK also) must declare any profits they made in the Indian markets in their US tax returns. This provision may or may not be enforceable, but this is the law.
- In Mutual funds, NRIs can only in funds from “Indian” AMCs like Reliance or HDFC. They cannot invest in US based AMCs like Fidelity etc.
These are some things I can think of –
Hari
11.19.07 at 2:09 AM
>Hari: Awesome! Thanks for that. I think India has restrictions on US investment – I didn’t know it applied to NRIs everywhere else.
Also, only the capital gain TAX will be withheld at source, not the entire gains.
11.19.07 at 8:58 AM
>Yes, this information has been around for a while now. But try opening even a PMS account with the HDFCs ICICIs, and you’d know what pain is- dealing with bank staff who don’t know what the heck it means to plain indifference. I heard the IL&FS offers a decent PMS account & service. But, I’m yet to find any decent brokerage firm that offers online trading to NRIs in the US.
11.21.07 at 6:04 AM
>AXIS BANK IS FRAUD, CHEAT AND LIAR
FIRST THEY SAY THERE ARE NO CHARGES BUT LATER IN SECRET THEY START CHARGING.
Carmen Viegas NRI relation manager In Goan, Margao Branch said to me there is no tax for NRI in trading and there are no additional bank charges. When I started trading, she demanded me one hundred thousand rupees (1 lac rupee) as minimum balance on NRI account as security for broker when market crashed which is totally illegal. She then transferred money from my NRI a/c to PIS a/c and said they are safe on my PIS a/c. My online account was also not working and when I requested she did not send me new online ID so I was unaware if they were safe on my PIS a/c account. The bank also did not send and statements. Later she stopped transferring money form PIS to NRI account so I closed the trading account with the broker. When I requested her to close my PIS a/c she was not ready to accept my closing letter and started delaying.
After she accepted the letter, I requested her to transfer all my money from PIS to NRI a/c and again she was delaying. After 10 days I called the customer care of Axis Bank and they said within few minutes money can be transferred. Later when I phoned her again she started delaying so I shouted at her. She then said bank have to calculate the charges and lied she have informed me, when I said she told me there are no extra charges. SHE WAS DELAYING ONLY BECAUSE I WILL KNOW THE BANK IS CHARGING ME. Only after I demanded for statement I came to know the bank have charged me. When I asked her again she lied she informed me about charges and said she will show me the form I have singed. When I requested to see the form I have signed, again she started delaying. Finally she showed me a blank form and said I have signed similar copy but did not show me the original form which I have signed. WHEN I STARTED THE PISA/C SHE TOOK MY SIGNATURE ON BLANK FORM SAYINGIT IS PERMISSION TO THE BANK TO TRANSFER MONEY FROM NRI TO PIS ACCOUND AND SAID THERE ARE NO CHARGES. I SIGNED THE BLAN FORM BECAUSE THE GOVERNMENT SAYS THIS IS THE BEST BANK.
She did not even send me PIS approval when I started the PIS account but later lied she have sent me the original copy. When I asked her for TDS certificate she sent me wrong TDS statement via. Email and did not correct even after requesting for correct statement.
When I reported the issue to the chief compliance officer, Mr. Kalpesh Raut zonal manager phoned me and apologized said he will send me correct TDS certificate and requested me to withdraw the complain. Later I sent him email saying I withdraw complain. After receiving my withdrawal email Mr. Kalpesh Raut sent me only statement and did not send me TDS certificate. Thereafter when I wrote to him he did not sent me TDS certificate, he replied Carmen Viegas have sent me TDS certificate via email. Later I sent him the wrong statement Carmen Viegas have sent me and said I did not purchase some scripts which she have mentioned in the statement. Mr. Kalpesh Raut deleted the names of all the script and sent me the statements and said it is correct. I again wrote to him before April 2008 the TDS was 10.3% and not 15.45% because in the statement they charged me 15.45% before April 2008. Thereafter Mr. Kalpesh Raut did not reply.
Again when I wrote to Carmen Viegas, she lied Mr. Kalpesh Raut have sent me TDS certificate via email as I have requested. I did not request TDS certificate via email, moreover TDS certificates are given on Banks letterhead and not through email because it is given to income tax department.
This bank is fraud and liar.
I am not the only person having this problem. Pleas click on the link below to me more complains on axis bank.
http://www.consumercomplaints.in/complaints/axis-bank-c26198.html
But our Indian government supports this bank and says it is the best. It was mentioned in the news paper at the end of last financial year.
Beware next person could be you. Stay away from this bank.
Philman Dias
philman_dias@yahoo.com
11.13.08 at 7:35 AM