How To Open A Demat Account In India As An Nri?

By Author: Milind Patil
Total Articles: 1
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A Non-Resident Indian (NRI) is an individual who resides outside India but holds an Indian Citizenship. An NRI cannot use the same Demat Account that was used by him/her during their status as an Indian Resident and will be required to close the same upon acquiring an NRI status.

While there are no restrictions on an NRI opening a Demat Account in India, they are certainly required to comply with the rules of the Foreign Exchange Management Act (FEMA).

In order to get started in the Indian Markets, they are required to link their Demat Account to their Bank Account.
There are two types of bank accounts held by NRIs, i.e., Non-Resident External (NRE) and Non-Resident Ordinary (NRO). While an NRE Account allows you to deal only in the Equity Segment, an NRO Account on the other hand enables you to dabble both in Equity and Derivatives.

There is no major difference between the Regular Demat Account and the NRI Demat Account opening process in the broader sense of the term; with the exception of a few cases. While an Indian Citizen can make do with a Regular Demat Account; an NRI, at the time of registering for a Demat Account has to choose between a Repatriable and a Non-Repatriable Demat Account. The rest of the process is more or less the same, with the exception of the above.

What’s the difference between the two?

A Repatriable Demat Account is for NRIs who wish to transfer money that they have earned overseas, to this account and freely repatriate these funds to other countries without restrictions. Further, there is no limitation on the currency type deposited as well. When choosing a Repatriable Account; you’ll have to ensure that it is linked to your NRE or Non-Resident External Account.

A Non-Repatriable Demat Account works well for those who wish to deposit money earned in India. The deposit has to be compulsorily made in the Indian currency. The funds from this account cannot be freely repatriated to other countries. For a Non-Repatriable account, ensure that it is linked to your Non-Resident Ordinary or NRO Account.

Apart from the Non-Resident External (NRE) and Non-Resident Ordinary (NRO) account and the Repatriable and Non-Repatriable clause, the process is the same.

While opening an NRI Demat Account, it will be useful if you keep the following documents handy beforehand. These include - Address Proof in India as well as Abroad, Passport Sized Photograph, PAN Card, Valid Visa and Passport Copy, FEMA Declaration and a Cancelled Cheque of your NRE/NRO Account. You will then be required to fill the Demat Account opening form as usual and complete the rest of the compliances followed by an Indian Resident.