PIS Account

The Portfolio Investment Scheme (PIS) is a scheme launched by the Reserve Bank of India (RBI) that allows NRIs to invest in Indian stock markets on a repatriation or non-repatriation basis, subject to certain conditions.

Under this scheme, NRIs can buy and sell shares and convertible debentures of Indian companies listed on recognized stock exchanges through a designated NRE or NRO bank account.

Types of PIS Accounts

1. NRE (Non-Resident External) PIS Account
   1. Funded with foreign currency, principal and gains are fully repatriable
   2. Used for repatriable investments
2. NRO (Non-Resident Ordinary) PIS Account
   1. Funded with income earned in India (e.g., rent, dividends)
   2. Repatriation is subject to limits
   3. Used for non-repatriable investments

Key Features of NRI PIS Account

• RBI Approval Required: Opening a PIS account requires prior approval from the Reserve Bank of India, typically facilitated by your bank (e.g., HDFC, ICICI, Axis).
• Dedicated Bank Account: PIS accounts must be linked to a designated NRE/NRO bank account exclusively used for stock market transactions.
• Eligible Investments: Only equity delivery trades (i.e., buying/selling stocks for delivery, not intraday or derivatives) are permitted.
• Daily Reporting to RBI: Banks are mandated to report all PIS transactions to the RBI on a daily basis.
• Investment Limits:
  • An NRI can invest up to 5% of the paid-up capital of an Indian company.
  • The total NRI holding in a company is capped at 10%, extendable to 24% by company resolution.

Benefits of a PIS Account

• Compliance-Friendly: Helps NRIs remain compliant with RBI regulations
• Repatriation Option: NRE PIS accounts allow full repatriation of capital and profits
• Transparent Reporting: Streamlined transaction reports and tax records via the bank

Limitations and Considerations

1. Investment Restrictions: Investment is limited to equity delivery. No intraday, short selling, or mutual funds via PIS.
2. Additional Costs: Banks may charge annual PIS account maintenance and transaction reporting fees.
3. Futures & Options (F&O) Not Allowed: You cannot trade derivatives through a PIS account. F&O trading requires a Non-PIS NRO account and a custodian account.

How to Open a PIS Account

To open a PIS account, you must:

1. Choose an Authorized Bank: Select a bank registered with RBI for PIS (e.g., HDFC, ICICI).
2. Submit Required Documents:
   • PAN Card
   • Passport with valid visa
   • OCI/PIO Card (if applicable)
   • Overseas and Indian address proof
   • FATCA & FEMA declarations
3. Apply for PIS Approval: The bank will process your PIS application and get approval from RBI.
4. Open a Linked Demat & Trading Account: Open a Trading account with Firstock to invest in shares under the PIS.

PIS vs Non-PIS: Which Is Better?

If you are primarily investing in equity delivery and wish to repatriate profits, a PIS account via NRE may suit you. However, for active trading and F&O, a Non-PIS NRO account is more flexible and cost-effective.

Final Thoughts

An NRI PIS account is a robust option for compliant, long-term equity investments in India. It offers a clear path for repatriation and structured reporting under RBI guidelines. That said, it comes with restrictions and may not suit all types of investors.

At Firstock, we partner with HDFC Bank to help NRIs open PIS accounts efficiently. We also offer a hybrid account opening process and full support for Non-PIS F&O trading through our integrated custodian model.

Want to open your NRI PIS account with Firstock?

Visit https://nri.thefirstock.com or email us at nri@firstock.com