NRE PIS Bank Account

The NRE PIS Bank Account is the NRE Saving Bank Account with the PIS permission from RBI to invest in India Stock Market. It facilitates NRIs to trade in stocks using the income earned abroad.

The NRE PIS Bank Account is the NRE Saving Bank Account with the PIS permission from RBI to invest in India Stock Market. It facilitates NRIs to trade in stocks using the income earned abroad.

The Non-Resident External (NRE) PIS account is a must for NRIs looking to trade/invest in stocks in Indian stock exchanges using the income earned abroad.

An NRE bank account is fully repatriable i.e. funds in NRE account can be taken outside India without permission from RBI. The funds can be converted into any foreign currency. Money can also be transferred from NRE account to NRO account.

Portfolio Investment Scheme (PIS) is a scheme by RBI for NRIs to buy and sell shares and convertible debentures of Indian Companies on BSE & NSE by routing such transactions through their bank account with a Designated Bank Branch.

For NRE PIS Account, the NRE Saving Bank Account is opened first. After this, the bank applies for PIS Certificate based on the PIS Application Form submitted by the NRI. Once PIS permission is received, it is linked with the NRE bank account and it becomes an NRE PIS Account.

Note that all transactions in NRE Account are reported to RBI once PIS permission is linked to the NRE account. It is highly recommended to use this account only for stock market investment.

NRE PIS Key Facts

1. NRE PIS account facilitates NRIs to trade in stocks using the income earned abroad.
2. NRE PIS account can be opened by NRI, PIO & OCI
3. Only 1 NRE PIS Account is permitted to an NRI. If you are planning to move to another bank, you have to close the existing NRE PIS account.
4. All the transactions done using NRE PIS account are reported to RBI by the bank.
5. Before trading, you need to transfer funds to NRE PIS account.
6. This account is offered by all major banks including ICICI, HDFC Bank, Axis Bank, and SBI.
7. A resident Power of Attorney (PoA) holder can be authorized to operate this account.

 

 

Answered on 2019-08-20

1. 1. Who can open NRE PIS account?

   NRIs, PIOs, and OCIs are eligible to open NRE Saving Bank Account (with PIS permission) in India. This account enabled them to invest in the Indian Stock Market on a repatriation basis.

   As each transaction in this account is reported to RBI by the bank, it is recommended to use the NRE PIS linked bank account specifically for stock market investment in India.

   Discuss this question

    

2. 2. Can I hold multiple NRE PIS accounts?

   No, NRIs can only open one PIS account. However, they can open multiple NRE savings bank accounts. You can open only one NRE PIS accounts.

   If you are planning to move your NRE PIS account to another bank, the steps will be as followed:

   • Close existing NRE Account
   • Open new NRE Account
   • Request for PIS permission on new NRE Account

   Note: NRIs can assign only one Bank for the purpose of routing the transactions under PIS for NRE and NRO. NRIs cannot maintain NRE and NRO accounts under PIS with different bank.

   Discuss this question

    

3. 3. How to open NRE PIS account?

   An NRE PIS account can be opened by any bank offering NRI services. All major banks like ICICI, SBI, HDFC, Axis and Yes Bank, etc., offers NRE PIS accounts.

   Note: RBI has delegated powers to designated branches of the banks to issue permission for Portfolio Investment Scheme.

   The PIS permission is taken on an existing NRE Bank account. The bank first opens an NRE bank account and then request for PIS permission on it.

   NRE PIS Account is linked with NRI Trading Account and NRI Demat Account to establish a source of funding for trading and investments. The interest and dividend earnings are automatically transferred to the NRE PIS Account.

   Discuss this question

    

4. 4. What is the difference between NRI PIS and Non-PIS Bank Account?

   NRI PIS and Non-PIS Bank Accounts are for NRIs and Person of Indian Origin (PIO) to invest in securities in India such as Equity Stocks, Mutual Funds, Bonds, IPOs, ETF etc.

   What are PIS and non-PIS accounts?

   1. PIS Account Meaning

      Portfolio Investment Scheme (PIS) is a scheme for NRIs by RBI. It facilitates NRIs and Person of Indian Origin (PIO) to buy and sell shares on repatriation basis in Indian stock markt.

      Key Points about PIS

      • The NRE PIS Bank Account is only for NRIs.
      • It is applicable only for trading in Indian stock markets
      • It is applicable only for trading in equity segment and not for other investments
      • Transaction in PIS account is reported to RBI

   2. Non-PIS Account Meaning

      A Non-PIS account is an ordinary NRI savings bank account (NRE or NRO) opened with any bank in India. The transactions in this account are not reported to RBI. The NRO Non-PIS Account can be used to invest in Equity Shares, IPOs, Mutual Funds and Bonds on non-repatriation basis.

   Difference between PIS and Non-PIS Account

   PIS vs Non-PIS Account

   Feature	PIS Bank Account	Non-PIS Bank Account
   Purpose	To buy/sell equity shares on repatriation basis.	To buy/sell equity shares and mutual funds on non-repatriation basis.
   Source of funds Basis	Can be repatriable	Can be repatriable or non-repatriable
   RBI Rules	The secondary market transaction is reported to RBI.	The secondary market transaction is not reported to RBI.
   Saving account	NRE Savings Account	NRE and NRO Savings Account
   Account Uses	NRIs can buy shares in the secondary market on repatriation basis through this account. This account cannot be used to make any other payments.	All the payment other than the secondary market investment on a repatriation basis is made through this account such as equity shares on a non-repatriation basis, MF, IPO, Bonds, and ESOP.
   Shares with resident status	The shares purchased as a resident Indian needs to be transferred to a new demat account on a non-repatriation basis.	The shares purchased with Indian residential status can be transacted through Non-PIS Account.

    

   

    

   Discuss this question

    

5. 5. What are the bank charges to open a PIS account?

   The PIS account opening charges vary from bank to bank. These are one-time charges required to be paid at the time of opening an account. Once the account is opened, you are required to pay annual maintenance fees (AMC) as charges towards maintaining the account. Apart from this, you also need to pay a fee for every buy and sell transaction executed through the PIS account.

   PIS Charges List by Bank

   Bank Name	PIS Account Opening Charges	AMC Charges	Other Charges
   SBI Cap Securities	Rs 750/	NIL (for 1st year) Rs 1,000 from 2nd year)
   HDFC Securities	Rs 1,000	Rs 1,000	Rs 100 per trade
   ICICI Securities		NIL (for 1st year) Rs 2,500 (from 2nd year)	Rs 50 per contract
   Axis Bank	Rs 1,000	Rs 1,500	Rs 150 per trade
   Kotak Securities	Rs 1,500	Rs 1,000	Rs 100 per contract

   Discuss this question

    

6. 6. Can NRI have two PIS accounts?

   As per RBI guidelines, an NRI is permitted to have one PIS approval from a chosen designated bank branch.

   The PIS approval received from RBI can then be linked with the NRE/NRO account depending on whether an NRI wants to trade on repatriation or a non-repatriation basis. Thus, an NRI can have only one NRE PIS account and one NRO PIS account.

   Note:

   • The NRE and NRO accounts are required to be opened with the same designated bank branch.
   • The PIS approval for the NRO mode of transactions is now not mandatory.

   Discuss this question

    

7. 7. Which transactions are not allowed under PIS?

   The transactions which are not covered under PIS account are:

   • The shares not purchased under the PIS account cannot be sold under PIS.
   • IPOs or shares purchased as resident Indians.
   • Fresh subscription made for IPOs as an NRI
   • Mutual fund investment.
   • Equity Derivatives investment.

   Discuss this question