Can NRI hold a demat account in India?

Yes, NRI's are permitted to have a demat account in India to hold securities in electronic format. These securities include shares of listed companies, mutual funds, ETFs, Bonds etc.

While opening a demat account, NRI has to choose account type as 'NRI Account' and subtypes as below based on the investment need:

1. NRE Demat Account (Repatriable Demat Account)
2. NRO Demat Account (Non-Repatriable Demat Account)

An NRI has to link his demat account with an NRE or NRO bank account (PIS or Non-PIS) based on the requirement. The dividends and proceed from the sale are deposited into this linked account.

Note that if you have recently become an NRI and hold a Demat Account (Resident Indian), you will have to close the existing demat account and open a new NRI demat account. You could choose to sell all the holding in your existing account or transfer them to the new account. When transferring, you may have to provide the proof of purchase i.e. contract note.