NRI Corner

Choose NRE accounts if you…

(Primary reason) want to park your overseas earnings remitted to India converted to Indian Rupees; want to maintain savings in Rupee but keep them liquid; want to make a joint account with another NRI; want Rupee savings to be freely repatriable.

Choose NRO account if you…

(Primary reason) want to park India based earnings in Rupees in India; want account to deposit income earned in India such as rent, dividends etc; want to open account with resident Indian (close relative)

NRE bank accounts are accounts that hold repatriable money. That is, money in such accounts can be converted back to a foreign currency. NRO bank accounts, on the other hand, are accounts that hold non-repatriable money. Money in NRO accounts will stay as Indian rupees and cannot be readily converted back.

If an investor has a choice, we would recommend using an NRO account for their mutual fund investing. The reason for this is the documentary requirements for operating an NRO linked mutual fund investing is less than that for an NRE account. Since money in NRE accounts are repatriable, mutual fund companies often ask for bank statement proof for every transaction to show that the money indeed did originate from an NRE account (FIRC rules). With an NRO account, there are no such requirements.

A note about mariners

If an NRI/PIO/OCI is earning income originating in India (such as salary, rent, dividends etc.) he/she is only allowed to deposit it in NRO account. Deposit of such earnings is not permitted in NRE account.

NRE Account
NRO Account
Account used to park overseas earnings which have been remitted back to India
Account used for Indian Based Earnings- For Example Rent from a flat owned in India, Stock Dividends etc.
Freely Repatriable
Repatriation Amount limited to USD 1 MM
Taxation at par with Indian Investor
Joint Holder can be another NRI- Not Indian Resident
NRO can be held with NRI as well as Indian resident

Frequently Asked Questions

Due to additional regulatory and compliance requirements for US and Canada Based Investors- only select Mutual Funds take investment from US & Canada based NRI Investors. Within these Mutual Funds- only select funds accept online investment.

Currently the below funds accept investments from US and Canada based investors:

d. ICICI Prudential MF
e. Nippon India MF
f. L&T MF
h. Axis MF

Yes – Monthly investments can be started / stopped / changed through your with Maloo Investwise Account.

Redemption can be done online by logging into your Maloo Investwise Account.

On-shore taxation would be as mentioned in the NRI / NRO section above. There can be additional tax implications specially once the money is repatriated back- this would vary across countries. Your local tax-advisor will be able to help you with that.

Can NRI invest in India?

NRIs are allowed to invest in India as per the rules and regulations of Foreign Exchange Management Act, 1999. While taxation on the earnings from the Investments is taxed as per the provisions of The Income Tax Act, 1961.

According to FEMA 1999, A person is considered as resident outside India:
If he or she stays outside India for a period of more than 182 days in the preceding financial year or
A person who has gone outside India:
(a) For or on taking up employment outside India, or
(b) For carrying on a business or vocation outside India, or
(c) For any other purpose, in such circumstances as would indicate his/her intention to stay outside India for an uncertain period.

Portfolio investments in shares/debentures by NRIs/OCBs (Overseas Corporate Bodies) are permitted only through designated branches of authorized dealers, preferably located at centers having stock exchanges. Authorized dealers should inform the names of such branches to Central Office of Reserve Bank and obtain approval. The Code number allotted by Reserve Bank should be quoted in all correspondence undertaken with Reserve Bank in this regard. Non-resident investors can also authorize Indian residents or stock exchange brokers as their agents in India to purchase/sell shares on their behalf under the schemes but all transactions should be routed through the designated branch of authorized dealer.

NRIs/OCBs will be permitted to make portfolio investment in shares/debentures (convertible and non-convertible) of Indian companies, with or without repatriation benefits provided the purchase is made through a stock exchange and also through designated branch of an authorized dealer. NRIs/OCBs are required to designate only one branch authorized by Reserve Bank for this purpose.

Investment in equity shares and convertible debentures will be permitted subject to an overall ceiling of
(a) 10 per cent of the total paid-up equity capital of the company concerned;
(b) 10 per cent of the total paid-up value of each series of the convertible debentures issued by the company concerned for all NRIs/OCBs taken together both on repatriation and on non-repatriation basis.

The purchase of shares and debentures under the scheme is required to be made at the ruling market price.

NRIs / OCBs intending to invest on non-repatriation basis should submit their applications in Form NRI / NRC respectively, through a designated branch of an authorized dealer, to Reserve Bank (Central Office). Reserve Bank will grant general permission to the concerned authorized dealer to purchase shares/debentures of Indian companies, securities (other than bearer securities) of the Central or any State Government and Treasury Bills on behalf of the NRI/OCB subject to the condition that the payment for such investment is received through inward remittance or from the investor’s NRE/FCNR/NRO/NRSR account.

The general permission granted by Reserve Bank would be initially valid for a period of five years. Authorized dealers may themselves renew the permission granted by Reserve Bank to individual NRIs as well as OCBs for a period of five years at a time.

NRIs and OCBs intending to invest with repatriation benefits should submit their applications through a designated branch of an authorized dealer in Form RPI / RPC respectively.

Reserve Bank will grant general permission to the designated branch for purchase of shares/debentures of Indian companies, securities (other than bearer securities) of the Central or any State Government and Treasury Bills, subject to the conditions that the payment is received through an inward remittance in foreign exchange or by debit to the investor’s NRE/FCNR account.

Investment made by any single NRI/OCB investor in equity/preference shares and convertible debentures of any listed Indian company should not exceed 5% of its total paid-up equity or preference capital or 5% of the total paid-up value of each series of convertible debentures issued by it and NRIs/OCBs take delivery of the shares/convertible debentures purchased and give delivery of the shares/convertible debentures sold under the Scheme

The general permission granted by Reserve Bank will be valid initially for a period of five years. Authorized dealers may themselves renew the permission granted by Reserve Bank to individual NRIs as well as OCBs for a further period of five years at a time. Authorized dealers may note to obtain the latest OAC/OAC 1 certificate from the OCB concerned before renewing the permission.

NRIs/OCBs intending to invest in the units of domestic mutual funds on non-repatriation/repatriation basis under the Portfolio Investment Scheme should apply to Reserve Bank (Central Office) in the above manner. However, approvals already granted for portfolio investment in shares/debentures of Indian companies will also be valid for purchase of units of domestic mutual funds.

Shares/debentures purchased by NRIs/OCBs should be held and registered in the names of either the investor himself or an authorized dealer or the latter’s nominee/s.

Shares/debentures can be purchased by NRIs in joint names with other NRIs with permission of Reserve Bank. In such cases, if the investment is with repatriation benefits, the first holder is to be treated as investor for the purpose of 5% ceiling. The second or third holder will be eligible to invest separately in the same company in his own name as the first holder in joint holdings up to the limit of 5%. Reserve Bank will also permit investment jointly with residents. However, if the resident joint holder inherits the shares/debentures, he/she will not be entitled to repatriation benefits.

The Reserve Bank has granted general exemptions sale/transfer of shares/bonds/ debentures through stock exchanges in India subject to fulfilment of certain conditions.

Applications for sale / transfer of shares / bonds /debentures held by NRIs/OCBs by private arrangement i.e. other than through stock exchange should be made to Reserve Bank in form TS 1 either by the transferor or the transferee, attaching therewith the letter of consent of the other party irrespective of whether the shares/bonds/ debentures are listed on a stock exchange or not. While conveying its approval, Reserve Bank will stipulate the conditions subject to which the sale/transfer should be effected. In cases of sale/transfer of shares/bonds/debentures acquired on repatriation basis, repatriation of such proceeds of bulk holdings (i.e. shares/bonds/debentures exceeding Rupees one lakh in face value or 5% of the company’s paid-up capital whichever is lower) will be permitted only on production of a certificate from a Chartered Accountant or the concerned company’s secretary stating that shares with necessary transfer forms duly signed have been received/lodged with the company for registration in favour of the transferee.


The Reserve Bank by its Notification No. FERA.149/93-RB dated 26th April 1993 has exempted the transfer of shares, bonds or debentures of Indian companies made by NRIs through stock exchange in India in case where:

Such transfers are made in favour of an Indian citizen or person of Indian origin resident in India or in favour of a company or other body corporate incorporated in India and sale proceeds of shares are credited to the NRO account of the transferor with no right of repatriation outside India.

In such cases, authorized dealers may credit the sale proceeds to the seller’s NRO account after verifying the contract notes issued by recognized stock exchange brokers through whom the sale was effected. This exemption is available in respect of shares, bonds or debentures acquired by NRIs under the Portfolio Investment Scheme as well as under any Direct Investment Scheme. For sale/transfer of shares, bonds or debentures by OCBs acquired on non-repatriation basis through a stock exchange in India, a consolidated application giving full particulars may be submitted to the concerned office of Reserve Bank. Permission will be granted by Reserve Bank for a specific period subject to renewal.


By its Notification No. FERA.151/93-RB dated 26th April 1993, Reserve Bank has also exempted transfer, by way of gift, of any share, bond or debenture of a company registered in India made by a non-resident Indian or person of Indian origin to a citizen of India or a person of Indian origin resident in India provided:
such share, bond or debenture was held by the transferor with the permission of the Reserve Bank,
such transfer is between relatives as defined in Section 6 of the Companies Act, 1956.

Transfer of rupee shares/securities by residents to non-residents by way of gift requires prior approval of Reserve Bank. Applications for such transfers should be made to the concerned Office of Reserve Bank and should, inter alia, contain the following information:

Name, address and permanent place of residence of both the transferor and the transferee.
Relationship between the transfer or and the transferee.
Reason for making the gift.

The Reserve Bank, by its Notification No. FERA 122/92-RB dated 17th September 1992, has granted general permission to companies in India to enter the overseas address in such cases provided the company obtains an undertaking from the holder of any security that he will not seek repatriation of any income, dividend or sale proceeds of the security. The dividend/interest earned on such securities or sale proceeds thereof should, therefore, be credited only to the Ordinary Non-resident Rupee (NRO) Account of the holder with a bank in India.

The Reserve Bank, by its Notification No. FERA.145/93-RB dated 26th April 1993 has granted general permission to NRIs/resident Indian citizens for conversion of their holdings in securities issued or registered in India, into joint holdings by addition of the names of persons of Indian nationality or origin subject to the following conditions:


An NRI may convert his holding into joint holding by addition of name/s of person/s of Indian nationality/origin resident in India provided
(i) transfer formalities as required under the Companies Act, 1956 are complied with
(ii) dividend income or sale proceeds of the securities accruing to the person resident in India are not repatriated outside India in the event of his becoming a non-resident sole (or joint named) holder of the security by succession, gift or otherwise.

A resident Indian citizen may convert his holding into a joint holding by addition of name/s of an NRI/s provided
(i) the resident holder continues to be the first holder;
(ii) the joint holding is treated as non-resident holding in the books of the company;
(iii) any dividend or income or sale proceeds becoming payable to NRIs are credited to his NRO account and
(iv) the securities are not sold or disposed of otherwise than through a member of a recognized stock exchange in India, except with the permission of Reserve Bank.

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