IDFC FIRST Bank Portfolio Investment Scheme (PIS) Account

Experience true convenience with your NRE PIS bank account. It is one of the easiest routes to invest in companies listed on the Indian stock exchanges.

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No minimum account balance
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Competitive charge scheme
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Instant Issuance of PIS Permission Letter
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Deduction of capital gain tax with set-off facility

Key Features

  • Earn up to 6% interest rate p.a. on Savings Account
  • Simplified paperless account opening process on net banking
  • Issuance of Capital Gain Statement on every sale transaction
  • Capital gain tax set-off facility

6% interest rate on Savings Account is applicable for balances up to
₹1 crore. Interest rates are subject to change at the sole discretion of
IDFC FIRST Bank

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What you should know before making NRE Investment using NRE PIS account:

  • You can only hold one NRE PIS account across all banks
  • Never invest in companies whose NRI limits are breached as per NSDL and CDSL
  • Do not make intraday trading transactions
  • Inform us about your SEBI-registered broker before investing
  • No Cheque book and debit card issuance

We are happy to offer you an NRO settlement account so that you may easily invest your funds lying in your NRO account and avail the above services with us.

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Schedule of Charges

Account or charge type AMC Issuance Transaction
(Separate for purchase and sell)
NRE PIS 500 Nil 100
NRO Settlement 500 Nil 100

All amount in Indian rupees. Charges are excluding GST

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FAQS

1) Can a Non-resident Indian (NRI) or an Overseas Citizen of India (OCI) may purchase or sell Capital Instruments of a listed Indian company on repatriation basis, on a recognised stock exchange in India?

Yes, subject to the following conditions: NRIs or OCIs may purchase and sell Capital Instruments through a branch designated by an Authorised Dealer for the purpose.

2) Is there any restriction on Investment limits on repatriation basis?

The total holding by any individual NRI or OCI shall not exceed 5 percent of the total paid-up equity capital on a fully diluted basis or should not exceed 5 percent of the paid-up value of each series of debentures or preference shares or share warrants issued by an Indian company and the total holdings of all NRIs and OCIs put together shall not exceed ten percent of the total paid-up equity capital on a fully diluted basis or shall not exceed ten percent of the paid-up value of each series of debentures or preference shares or share warrants;

Provided that the aggregate ceiling of 10 percent may be raised to 24 percent if a special resolution to that effect is passed by the General Body of the Indian company

3) What is the mode of payment to purchase the Capital Instruments of a listed Indian company on repatriation basis, on a recognised stock exchange in India?

1. The amount of consideration shall be paid as inward remittance from abroad through banking channels or out of funds held in a Non-Resident External (NRE) account maintained in accordance with the Foreign Exchange Management (Deposit) Regulations, 2016.

2. An NRE (PIS) Account will be open and the designated account shall be used exclusively for putting through transactions.

4) Can NRI’s or OCI’s remit the money received from sale proceeds?

Yes, the sale proceeds (net of taxes) of the capital instruments may be remitted outside India or may be credited to NRE (PIS) account of the person concerned.

5) What is Portfolio Investment Scheme (PIS)?

The Portfolio Investment Scheme (PIS) is a scheme of Reserve Bank of India defined in Schedule 3 of the Foreign Exchange Management Act 2000. As per the scheme, NRIs can purchase and sell shares and convertible debentures of Indian Companies on a recognised stock exchange by routing such purchase/sale transactions through their NRE PIS account with a Designated Bank Branch.

6) How can NRIs invest in shares in India?

As per Reserve Bank of India (RBI) guidelines, NRI who wishes to invest in shares in India through a stock exchange need to approach the designated branch of any authorized dealer (bank) authorized by reserve bank to administer the PIS (Portfolio Investment Scheme) to open a NRE (Non Resident External) account under the scheme for routing Investments on repatriation basis.

7) Can PIS account be in joint names?

No. We are offering account under Single holding pattern only.

8) What are the reporting requirements under PIS?

Authorised Dealer banks would be required to provide the details of investment made by their respective NRI clients to the depositories in the format as provided by the depositories/ SEBI. In addition, the reporting to Reserve Bank in the existing system, viz., LEC (NRI)

Trading partner of customer needs to submit contract notes for both purchase and sale within the time(T+1) specified by the designated bank to enable designated banks to report it to NSDL, CDSL and Reserve Bank of India.

9) Are Investment positions of NRIs are monitored?

Reserve Bank of India, CDSL & NSDL monitors the investment position of NRIs in listed Indian companies, reported by designated banks, on a daily basis. The depositories and exchanges shall display the available investment headroom, in terms of available shares, for all companies for which the breach has been activated, on their respective websites as mentioned below

CDSL: https://www.cdslindia.com/publications/FIMonitoring.aspx
NSDL: https://www.fpi.nsdl.co.in/web/Reports/ForeignInvestmentLimitMonitoringListing.aspx
BSE: https://www.bseindia.com/static/markets/equity/EQReports/mfi_limits.aspx
NSE: https://www1.nseindia.com/corporates/content/listed_daily_fi_limits.html

10) Do NRI Clients needs to ensure not to purchase the share of company falling in breach list on repatriation basis (NRE)?

Yes, NRI Clients needs to ensure securities are not in RBI, NSDL and CDSL breach list before executing the purchase order.

11) How does an NRI correct his/her position if the purchased shares / convertible debentures are in excess of the prescribed limit, or fall under breach list?

NRI will have to off load such portion of the holding, which is in excess of the prescribed limit. Refer SEBI circular for details on Method of disinvestment : https://rbidocs.rbi.org.in/rdocs/content/pdfs/SEBI05042018.pdf

12) Can an NRI transfer shares purchased under PIS to others under private arrangement?

Shares purchased under PIS on stock exchange shall be sold on stock exchange only. Such Shares cannot be transferred by way of sale under private arrangement or by way of gift (except by NRIs to their relatives as defined in Section 6 of Companies Act, 1956 or to a charitable trust duly registered under the laws in India) to a person resident in India or outside India without prior approval of the Reserve Bank.

13) Is it mandatory to route the secondary market transactions through PIS designated account only?

Yes, It is mandatory for a NRI to route all secondary market transactions through his PIS designated account i.e For all purchase / sell of stocks in secondary market only the PIS designated account should be debited / credited.

14) Can NRI do Intra-day transactions in cash segment?

No, NRI Investor has to take delivery of shares purchased and give delivery of shares sold. Short Selling is not permitted.

15) In case a person who is resident in India becomes a non-resident, will he/she be required to change the status of his/her holding from Resident to Non-Resident?

You can send money in 14 currencies - USD, EUR, GBP, CAD, AUD, CHF, AED, SGD, HKD, NZD, JPY, ZAR, NOK, CNH.

16) In case a non-resident Indian becomes a resident in India, will he/she be required to change the status of his/her holding from Non- Resident to Resident?

Yes. It is the responsibility of the NRI to inform the change of status to the designated authorized 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 NRE/NRO demat account to resident account and then close the NRE/NRO demat account.

17) Can an NRI purchase securities by subscribing to IPO ? Is PIS permissions required?

Yes. NRI need not obtain any PIS permission for applying in Primark market transactions like IPO. NRI Clients should provide the details to the designated bank regarding Quantity and date of allotment and cost of acquisition to calculate the taxes, if any.

18) Where will sell proceeds of share acquired through primary market get credited i.e. IPO/FPO/Rights/Bonus/ESOP?

Sell proceeds of shared acquired through Primary Market will get credited to respective NRE /NRO Savings Account of NRI.

19) Can an NRI hold multiple NRE PIS account with multiple banks?

No. NRIs cannot maintain NRE PIS with different banks. NRIs can assign only one Designated Bank for the purpose of routing the transactions under PIS for NRE.

20) Is there any Tax obligation?

The sales proceeds can be deposited after deduction of the applicable tax.

21) What is "Tax Deduction at Source (TDS)" on capital gains arising out of sale of holdings by NRIs?

As per Indian tax laws, all the capital gains arising out of sale transactions are subject to tax. In the case of NRIs, the capital gain arising out of sale transaction is subject to deduction of tax at source (TDS) i.e. at the time of crediting the sale proceeds to the respective NRE/NRO account by the concerned bank branch. Accordingly, the concerned bank shall determine the tax liability and tax will be deducted at source. The concerned bank, which has deducted tax at source, shall issue a certificate in this regard

22) What is the Tax rate applicable for NRIs and OCI’s on Long Term Capital Gains?

A new Section 112A is proposed to tax LTCG on gain on transfer of listed equity shares @ 10%, for gains in excess of Rs. 1 lakh. This provision is applicable from April 1, 2018. (surcharges will be applicable as per slabs)

23) What is the Tax rate applicable for Short Term Capital Gains - Section 111A for NRI’s and OCI’s?

e bank is required to deduct tax from the capital gains on sale of shares at specified rates of 15% (plus Health and Education Cess @ 4%) on short-term capital gains. (surcharges will be applicable as per Tax slabs)

24) Can NRI’s and OCI’s received rights/bonus shares by companies in India?

FEMA provisions allow Indian companies to issue Rights / Bonus shares to existing non-resident shareholders, subject to adherence to sectoral cap as may be applicable.

25) What is the cost of acquisition applicable on allotment of Bonus shares to NRI’s and OCI’s ?

Cost of acquisition of bonus shares is taken as zero hence the capital gain on selling a bonus share is equal to its selling price and the period of holding is computed from the date of allotment of such bonus shares.

26) Can NRIs receive shares in inheritance?

Yes, as an NRI you can receive shares in inheritance. RBI permission is not required to be obtained and the shares will be held on non-repatriable basis in NRO Demat account.

27) Things NRI/OCI Clients need to take care before Transferring NRE PIS account to IDFC FIRST Bank.

Below is the list of documents required in case of transfer of NRE PIS account
1. No objection certificate from erstwhile PIS service provider
2. Holding Statement with rate, date, quantity and company Name with ISIN
3. Holding Statement to mentioned clearly the mode of acquisition is from NRE or NRO

28) Do I need to ensure Holding with my Bank and Demat account are equivalent?

Yes, we suggest you to update the details post account opening and periodically match the holding in your Demat account with bank details.

29) How bonus, corporate action and IPO details are updated in bank records?

We suggest you to please provide the detail in Holding declaration format to Bank for IPO and corporate action. Bank needs to update the cost and date of acquisition against each share to follow FIFO method for Tax calculation.

30) Can NRI trade in futures and options segment of the Exchange?

Yes, through NRO account. Please approach you SEBI Registered Broker for more details.

31) Are you supporting NRE/NRO demat and trading account with all SEBI registered brokers?

No, currently we have empanelment with Zerodha Broking Limited for opening of NRI demat and trading account. We are looking forward to add more SEBI registered brokers. You can reach out to your NRI RM or nearest IDFC FIRST Bank branch for more details.

You can refer below link for more details on NRI offering from Zerodha Broking Limited

https://support.zerodha.com/category/account-opening/nri-account-opening/articles/how-to-open-an-account-as-a-nri

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