NRO Non-PIS Trading account

Can NRI invest in India without PIS? The answer is “Yes”. Are you an NRI hoping to invest in India without PIS permission, you can do so by opening an NRO non-PIS account.

The article covers all you need to know about no-PIS NRO Accounts including the types of NRI accounts, investment options available, charges applicable to NRO no-PIS NRI accounts, benefits, and how can NRI open NRO non-PINS trading account.

As a NRI, you can have either open NRE (Non-Resident External) or NRO (Non-Resident Ordinary) bank account in India. Based on the type of NRI bank account you choose to open, RBI PIS permission may be required or not. An NRI, PIO, or OCI can open either NRE PIS account or NRO non-PIS trading and demat accounts in India.

Let’s first understand what is NRO Bank Account.

What is NRO Account?

NRO or Non-Resident Ordinary is a bank account for NRIs to manage the income earned in India.

NRI can have different types of income in India like rent, pension, dividend, etc. that can be deposited into NRO bank account. Thus, NRO account allows NRIs to deposit and manage all their rupee earnings from India at no hassle.

NRIs who wishes to use Indian income to invest in the Indian share market should consider opening NRO bank account.

NRO Account – Key Takeaways

• NRO account is used to manage the income earned by NRI clients in India.
• A non-resident can open NRO account with another NRI or Indian resident.
• Internal fund transfer from NRE to NRO account is permitted whereas money in your NRO account cannot be transferred to NRE account.
• Interest earned on the NRO account is subject to TDS.
• Money from the NRO account is not fully repatriable as subject to a maximum ceiling of USD 1 million.

NRO Non-PIS Account

NRO Non-PIS account means NRO bank savings account in India without PIS permission.

Since PIS approval is not mandatory for NRO bank account, NRI is allowed to trade or invest in India through a no-PIS NRO trading account. It allows NRIs to use Indian rupee income as well as foreign earnings to invest in Indian stock exchanges.

NRIs can use a no-PIS NRO account to purchase and sell shares listed on BSE and NSE on a non-repatriation basis. It means, that money credited to your NRO account cannot be repatriated or transferred abroad. An NRI can withdraw or remit a maximum of USD 1 million in a financial year and that too after RBI approval.

NRO Non-PIS account – Key Takeaways

• A no-PIS NRO trading account combines NRI Trading and Demat account mapped with NRO bank account.
• NRI does not require obtaining RBI PIS permission for NRO account to transact in the Indian stock market.
• NRI can use NRO non-PIS account to invest in equities, convertible debentures, bonds, IPOs, and mutual funds.
• A non-PINS NRO account allows NRI investment on a non-repatriable basis.
• NRO non-PIS account can be opened with any bank in India, whether your broker has a tie-up with the respective bank or not.
• There are 125+ banks available in India that allow non-residents to open an NRO bank account online in just a day.
• NRI service offering stockbrokers in India offers online NRO non-PIS account opening facility.
• All the NRI investment held through the NRO no-PIS account is considered as domestic investment.
• An NRO account along with a NRI demat and trading account and a custodian account allows equity F&O trading.
• No-PIS NRI transactions does not require RBI reporting.
• NRI can link more than one NRO savings bank account to the trading account for investment.

NRO Non-PIS NRI Trading account and charges

NRI intend to trade with NRO mapped no PIS account requires the below accounts:

NRO Non-PIS Account Investment segments

If you have a no-PIS NRO trading and demat account in India, you can invest in the following segments:

• Equity shares listed on BSE and NSE (Delivery trading)
• Convertible debentures/preference shares
• Bond
• Warrants
• Exchange Traded Funds (ETFs)
• Equity derivative (F&O) trading with custodial account
• Apply for IPOs
• Mutual fund investment (Restricted for USA and Canada-based NRIs)

Some stock brokers like Prostocks and Tradeplus allow intraday trading facilities on NRO non-PIS account.

How to open NRO non-PIS Account?

Are you an NRI who want to invest in the Indian equity market without a PIS certificate? If yes, open a NRO non-PIS trading account.

You can open a NRO Bank savings account with more than 125+ banks in India. Indians who become NRI after shifting abroad can also convert their resident savings account to an NRO bank account, know more.

An NRI can directly approach stockbrokers too for NRO account opening. Full-service stock brokers are part of a bank and offers both NRE and NRO account and discount brokers have tie-ups with several domestic banks to allow NRIs to open NRO non-PIS account online. You have to provide your basic details, PAN details, and other required information to register E-KYC. Once the online process is done and you have submitted copies of the required documents to the bank, the NRO account will be opened.

The next step is to open NRI trading and Demat account linked with NRO savings account with your choice of broker. Discount stock brokers like Zerodha, Fyers, Prostocks, etc. offers flat brokerage NRI trading services whereas traditional bank-based full-service stock broking firms charge high brokerage fee but provide additional services like an integrated NRI 3-in-1 account, research & advisory, and portfolio management services (PMS), and more. Now, NRI can invest in Indian equity shares listed on NSE and BSE.

NRO No-PIS NRI Trading Process

NRI investment routed through NRO non-PIS account works a similar way as that of residents in India. Check how NRI investment works in no-PIS mode:

1. Open NRO bank account, NRI trading account, and NRI Demat account.
2. Transfer funds from a linked NRO savings account to your trading account as per your requirements.
3. Place a buy/sell order in your choice of scrip.
4. Once the order is executed, the settlement process starts depending upon the amount of your trade order.
5. In case of a buy order, the broker will debit funds from the trading account margin. And, shares you have purchased will be transferred to your NRI Demat account.
6. When a sell order is executed, the stock broker will credit the sale proceeds to your trading account. And, shares will be debited from the Demat account.
7. Funds available in your trading account can be withdrawn to the linked NRO account. NRI account holder can place a fund withdrawal request with the broker to get the money into their bank account.

NRO PIS Vs NRO Non-PIS Account

Although PIS authorized by RBI is not mandatory for NRO bank account. However, the choice is completely yours, whether to invest in India through PIS account or a non-PIS route. As a NRI, if you want to channel your investment through PIS mode, you can get PIS approval on your NRO account too.

In the PIS mode, the bank plays an important role in the settlement of all trades and reporting to the RBI.

Check out the differences between NRO PIS and NRO Non-PIS accounts:

Benefits of NRO Non-PIS NRI Account

• Transact in equity shares, mutual funds, IPOs, ESOPs, bonds, etc.
• You do not require a PIS letter which saves PIS account charges like account opening charges, and maintenance charges (AMC).
• All the trades and fund settlements will be processed with the NRI broker.
• NRIs with NRO accounts (PIS or no-PIS) permit trading in equity derivatives segment.
• Brokers may charge lower brokerage fees on NRO no-PIS accounts. Zerodha charges a max of Rs 100 per order on an NRO non-PIS account whereas on NRE PIS account, the maximum brokerage charged is Rs 200 per order.
• There is no investment cap or maximum limit on NRI investment channeled through the NRO non-PIS route.
• No reporting to RBI.

NRO Non-PIS Account Opening Documents

Here are the documents an NRI needs to invest in the Indian share market through a non-PIS NRO trading account;

• Passport size photograph
• PAN number
• Foreign/overseas address proof
• Indian address proof
• A copy of passport
• FEMA and FATCA declaration
• NRO bank account proof or canceled cheque leaf

NRO Non-PIS Account Restrictions

• As per regulations, BTST buy today sell tomorrow or short selling is not permitted to NRIs.
• Commodity trading is not allowed.
• NRI cannot trade in currency derivatives.