Indian stock market is one of the top 4 markets in the world, hence people from all over the world want to invest in the Indian stock market. NRIs can also invest in the Indian stock market. For this they will need NRE demat account. There are many such trending platforms in India including Angel one where NRI demat account can be opened. The process of opening a demat account for foreign citizens of Indian origin is slightly different from that for native citizens.
Types of NRI Demat Account
There are two types of demat accounts opened in India for NRIs.
First NRE (Non Resident External) This account allows NRIs to invest in stocks, bonds and mutual funds in the Indian stock market. But permission for option and intraday trading is not available. These accounts are mainly for investing in the stock market. NRI can also withdraw the amount deposited in these accounts in his own currency of his country. He just needs to link his NRE demat account with his NRI bank account.
Secondly, NRO (Non Resident Ordinary) account. Through this type of account, NRIs can trade and invest in equity stocks, options, bonds and mutual funds. But the amount invested by the NRI will remain in his NRO demat account only. He cannot transfer it from his account in currency of any country other than India. Withdrawals can be made only in Indian currency using an Indian partner bank account.
Process to open NRI demat account
SEBI gives permission to open NRI or NRO account under PIS (Portfolio Investment Scheme). For PIS, any NRI will have to apply to the Reserve Bank of India. PIS itself is the permission letter from the Reserve Bank for NRI Demat account. However, no permission is required for NRO account. RBI permission letter is required only for NRE account.
NRI demat accounts can be opened through both offline and online processes. In the offline process, you will have to go to the office of your trading platform (broker) and submit the required documents for demat account like PAN card, Visa, address proof, passport photo, your NRI bank account and PIS permission letter along with the demat account opening form. NRI demat account will be opened after broker document verification. Due to which NRIs can invest in the Indian market even in their own country.
In the online process, NRI has to visit the website of any trading platform like Angel One. There you have to upload the scanned copies of all the documents required to open the account. On many trading platforms, a copy of the document has to be sent to their email. After document verification, the NRI demat account will be opened in some 24 to 48 hours.