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Tata Capital > Blog > What is Portfolio Investment Scheme for NRIs?

Wealth Services

What is Portfolio Investment Scheme for NRIs?

What is Portfolio Investment Scheme for NRIs?

Are you a Non-Resident Indian (NRI) looking to trade on the Indian stock exchanges? Then, the Portfolio Investment Scheme (PIS) is for you. This unique and convenient scheme allows NRIs to invest in Indian stocks and bonds helping you grow your wealth steadily.

If you’re wondering what this is, you’re in the right place. Here, we explore everything you need to know about the Portfolio Investment Scheme.

What is Portfolio Investment Scheme for NRIs?

Reserve Bank of India’s (RBI) Portfolio Investment Scheme (PIS) aims to help NRIs invest in the Indian stock market. As per the provisions of Schedule 3 of the Foreign Management Act 2000, NRIs can buy and sell convertible debentures of companies registered in India through a recognised stock exchange by routing their transactions via an account in a designated financial institution.

A PIS account enables this. You can invest on a repatriation or non-repatriation basis. For the former, you need a Non-Resident External (NRE) Rupee account, while for the latter, you need a Non-Resident Ordinary (NRO) account. Irrespective of what you choose, a PIS account helps you:

  • Invest in Indian shares and bonds
  • Invest in Futures and Options (FnO)
  • Invest in a limited number of shares (below 5% of the company’s paid-up capital and below 5% of the total paid-up value of every series of convertible debentures)

Benefits of the Portfolio Investment Scheme

Here is why you should consider PIS if you’re an NRI:

1. Helps Diversify Portfolio: PIS allows you to invest in Indian stocks, helping you diversify your investment portfolio. This, in turn, helps you create a stronger portfolio that is less immune to market changes.

2. Enhances Growth Potential: India is one of the fastest-growing economies in the world. PIS helps you grow your wealth by helping you invest in the Indian stock market.

3. Streamlines Investment Process: Your PIS account makes investing in Indian stocks easy and convenient.

Restrictions of the Portfolio Investment Scheme

Investors must keep the following restrictions in mind when considering a PIS account:

  • PIS restricts investors from investing in certain businesses, such as those involved in agriculture, plantation and chit funds.
  • NRIs cannot open a PIS account as a joint account
  • Select investments aren’t eligible for repatriation benefits
  • NRIs cannot have an NRE or NRO account if they become a resident Indian

How to Open a PIS Account?

Here are the steps to follow to open a PIS account:

Step 1: Research and compare financial institutions that offer PIS services to find one that meets your needs.

Step 2: Fill out the PIS application form and submit all necessary documents. These could include your passport, visa, proof of address, etc.

Post the submission of your application, the financial institution will process it and verify your documents. You will be notified of the same, and you can start investing right away!

To Sum Up

PIS for NRIs is, by all means, a standout scheme that helps you grow your money while abroad. Now that you know what it is, its distinct benefits and how you can go about opening your PIS account, all that’s left to decide is your financial partner in this journey.

We offer a holistic bouquet of investment services specially curated for NRIs like you to help you navigate the Indian market deftly. We bolster your investment portfolio with the latest investment insights and our rich experience in the Indian financial market to ensure your portfolio stays on track to meet your goals.

To learn more about our offerings, visit the Tata Capital Wealth website today!

Build Your Wealth with Expert Guidance from Tata Capital!

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