Investing norms for NRIs

Non-Resident Indians (NRIs) are allowed to invest in mutual funds in India. We answer some queries on the investing norms for NRIs.

Can a Non-Resident Indian (NRI)/Person of Indian Origin (PIO) invest in Mutual Funds? Can NRIs from any country invest?

Yes. NRIs and PIOs can invest in Indian mutual funds. However, some funds may not allow NRIs from certain countries to invest. NRIs must read the Scheme Information Documents and Statements of Additional Information to get more information in this regard or contact the fund houses.

Please explain the guidelines for investing in Mutual Funds by an NRI.

NRIs can invest in Indian mutual funds through their NRE/NRO/FCNR accounts.

The investment has to be made only in Indian rupees. The NRI may also send a rupee cheque from abroad, payable at a bank in India. The ‘investor status' in the form should be marked as ‘NRI' and the bank details of the NRE/NRO account have to be mandatorily provided.

For an NRI to invest, it is mandatory that he/she maintains a bank account in India. AMCs do not accept an NRI application with an overseas bank account detail. NRIs should be KYC-compliant to invest in mutual funds.

Can NRIs invest on a repatriable basis?

To invest on a repatriable basis, the amount representing the investment should be received by inward remittance through normal banking channels (cheque or rupee-denominated demand draft, if it is from an overseas account) or by cheque drawn on or debited to an NRE/FCNR account of the non-resident investor.

Redemption proceeds/dividends will be credited to the NRE bank account or paid out by cheque in Indian rupees.

The redemption proceeds and/or dividend can be repatriated in full.

How can an NRI redeem investments?

The redemption proceeds get processed in the normal course by the investor submitting the redemption request form.

The redemption proceeds will be paid by cheque or credited to the first unit-holder's account.

Where the purchase of units is made on a non-repatriable basis, the maturity proceeds/repurchase price of units (after payment of taxes) will not qualify for repatriation and may be credited to the NRO account.

Can a Power of Attorney (PoA) invest on behalf of the NRI investor?

Yes. A PoA has the authority to invest on behalf of an NRI and sign documents for first and additional purchases, as well as redemptions. While subscribing for units the PoA holder should submit the original PoA, or a duly notarised copy of the same. The same will be registered in the folio.

Is nomination by NRIs allowed in mutual funds?

Yes, NRIs may make a nomination and also be nominees in folios of mutual funds.

How can NRIs keep track of their investments?

NRIs are urged to register their e-mail IDs while making a purchase. This would entitle them to a host of online services and facilities offered through www.camsonline.com .

NRIs can get consolidated account statements, portfolio valuation statements and a lot more.

(Contributed by CAMS Viveka, Investor Education Team of CAMS. The views expressed herein are general practices in the mutual fund industry and may vary on a case-to-case basis.)

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