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India is one of the fastest-growing economies in the world. Hence, it is considered favourable for investment purposes, especially for NRIs in Indian companies. NRI is a Non-Resident Indian who is residing outside India. Moreover, for an NRI to trade in the Indian stock market, one needs to have a demat account. Also, the demat account for an NRI helps them to trade in bonds, stocks, IPOs, mutual funds and more. Here, in this article, we shall provide a complete guide on Demat account for NRI (Non-Resident Indian).

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Who is an NRI Non-Resident Indian?

According to FEMA (Foreign Exchange Management Act ), “an NRI is a person resident outside India who is either a citizen of India or a person of Indian origin (PIO)”

As per the taxation rules, an NRI is a person who does not satisfy either of the two conditions –

  1. If a person is in India for 182 days or more during a financial year.
  2. If a person is in India for a period of 60 days or more during the previous year and 365 days or more during four years immediately preceding the previous year. 

Can NRI invest in shares in India through a stock exchange?

A Non-Resident Indian (NRI) can invest in the Indian stock market by purchasing shares through the Portfolio Investment Scheme (PIS) on a repatriation and non-repatriation basis. Also, the PIS scheme is a part of the Reserve Bank of India (RBI) that enables NRIs to acquire shares or convertible debentures from the stock exchange through a bank account with a nominated branch. However, as per the latest guidelines, the PIS scheme is not required for NRO (Non-Resident Ordinary) as they will be treated as investments by residents.

What is a Demat Account?

A demat account is also known as a demateralized account. It is an account that stores financial securities in an electronic form. Also, a demat account facilitates the purchase and sale of financial securities seamlessly. Furthermore, it holds equity shares, debentures, bonds, government securities, ETFs, mutual funds, etc., in dematerialized format. A demat account is similar to a bank account, where the demat account is either credited or debited each time you buy or sell shares of a company.

All demat accounts in India are maintained by National Securities Depository Limited (NSDL) or Central Depository Services Limited (CDSL).

Read also about the Trading Account

Can an NRI hold a Demat Account?

In India, both resident Indians and non-resident Indians (NRIs) can hold a demat account to trade in equity. However, if an NRI wants to open a demat account, they have to follow the rules of the FEMA (Foreign Exchange Management Act). An NRI can open both  Repatriable and Non- Repatriable demat accounts. 

For a Non-Resident Indian NRI to trade in secondary markets, they can operate a demat account only post seeking Portfolio Investment Scheme (PIS) licences from designated banks to make investments in India.

As per the Reserve Bank of India (RBI), an NRI can only hold up to 5% of paid-up capital in an Indian company. An NRI can invest in Initial Public Offers (IPOs) on a repatriable basis using NRE demat. If the NRI invests on a non-repatriable basis, then the NRO account and NRO demat will be used.

However, suppose an individual has a demat account before gaining the status of NRI. In that case, they can convert it into the NRO category to trade after leaving the country or open a new account. Also, the existing brokerage firm will transfer the shares previously owned to the new NRO holding account.

Types of NRI Demat Account

NRI Demat Account is an account by NRI, PIO (Person of Indian Origin) & OCI (Overseas Citizen of India) cardholder. It is very similar to a resident demat account where the account opening process, transactions, charges are the same. A demat account is mandatory for investing in the stock market in India. Furthermore, one can also invest in mutual funds, ETFs, convertible debentures through this demat account.

The following are the two types of NRI Demat Account.

NRE Demat Account 

For an NRE demat account, an NRE bank account is associated with it. An individual who opens an NRE account is to manage funds earned abroad. Therefore, the money is fully repatriable, i.e. the money can be transferred abroad. Also, an NRE Demat Account is known as Repatriable Demat Account. The reason is, all the proceeds from the sale of securities can be transferred abroad. 

NRO Demat Account

For an NRO demat account, an NRO bank account is associated with it. An NRI opens an NRO account to manage funds earned in India. Also, an NRO Demat Account is known as a Non-repatriable Demat account. The reason is, not all money can be transferred abroad. The principal amount of investments are repatriable after paying taxes. As per RBI rules, it allows a transfer of up to $1 million of funds abroad in a financial year. The interest earned on this account is repatriable after TDS is deducted.

Overall, as per RBI regulations, An NRI has to open two separate demat accounts for repatriable and non-repatriable investments.

NRE Demat Account vs NRO Demat Account

The following are the differences between NRE & NRO Demat Account.

ParametersNRE Demat AccountNRO Demat Account
PurposeFor investments on a repatriation basisFor investments on a non-repatriation basis
Type of bank account linkedNRE bank accountNRO bank account
Repatriation of FundsFully repatriableThe principal amount is repatriable after taxation. One can transfer up to $ 1million in a financial year. The interest earned is repatriable after TDS is deducted.
Also known asRepatriable demat accountNon-repatriable demat account

NRI Demat Account Opening Process

An NRI can open a demat account and trading account with the depository participant or stockbrokers or a bank registered with NSDL and CDSL. Therefore, stockbrokers provide 2-in1 account services while a bank provides 3-in-1 account services. However, all the 3 offer the prerequisites to open a demat account. 

Firstly, the NRI has to select the account type as ‘repatriable demat account’ or ‘non-repatriable demat account’ based on their choice. They can open a demat account either online or offline. 

The following are the steps to open a demat account – 

  1. Download and fill the demat account opening form.
  2. The next step is to attach all the required documents. The documents shall be self-attested and notarized by the Indian embassy or any other competent authority. 
  3. Submit the filled form to the participant chosen by the individual. 

Before opening a demat and trading account, the NRIs should have the following in hand – 

  1. PAN card of the applicant
  2. NRI bank account (NRE or NRO) of the applicant
  3. PIS letter of approval issued directly by the Reserve Bank of India to NRI applicant. 

What are the documents required to open an NRI Demat Account?

The following are the documents required to open an NRI Demat Account – 

  1. A duly filled account opening form and signed by the account holders.
  2. Portfolio Investment Scheme (PIS) letter of approval issued directly by the Reserve Bank of India to the NRI applicant. 
  3. Passport-sized photograph of the account holder with their signature across the photo.
  4. Scanned copy of PAN card
  5. Overseas address proof of the holder.
  6. Copy of Visa and passport
  7. A cancelled cheque of the NRO/NRE bank accounts has to be linked to demat account.
  8. Photograph and signature of the nominee for using the nomination facility of the demat account. 

All the above documents should be attested by the Notary, Banker or Indian Embassy of the country where the NRI resides.

Benefits of demat account for NRI –

The following are the benefits of the NRI demat account –

  • An NRI can make investments in the stock market in India quickly and easily from any part of the world. The transactions made by NRI immediately reflect in the demat account. 
  • The physical documentation process of the transactions also reduces.
  • The transactions made in NRI demat accounts happen quickly and efficiently.
  • NRI demat account has minimal risk of forgery, loss of physical documents, late delivery and other problems. 
  • The NRI demat account can even hold a minimum of one share. 
  • An NRI can invest in shares, convertible debentures, ETFs, mutual funds, etc. 

NRI Demat Account Charges

All the demat accounts in India attract certain costs either for resident demat accounts or non-resident demat accounts. Central depositories and the stockbroker depository participant charge the demat account and transaction-related fees. However, in the case of NRI, they also pay governmental taxes. The following are the charges for NRI demat account – 

Account Opening Fee (One Time)

It is the most common fee that every stockbroker or depository participant in India charges to all their customers, whether NRIs or resident Indians. The brokerage firm charges the account opening fee for processing and opening one’s demat account with that broker. It is a one-time fee paid during the account opening process. Sometimes, the account opening charges can be discounted due to promotional campaigns by the brokerage firms. In other cases, the promotional campaigns by brokerage firms waive the account opening charges entirely.

Annual Maintenance Charges (Yearly)

To maintain and run one’s demat account with brokers, there are certain charges. Generally, this fee is charged annually by the brokers and referred to as AMC or Account Maintenance Charge. This fee remains the same for both residents and NRIs. Whether it is an NRI demat account or a resident demat account, the individual has to pay these fees every year to ensure that they can use this account for the following year.  However, this fee is much lower than the account opening fee. 

Debit Transaction Charges

Whenever the shares in the demat account are sold or withdrawn, a nominal fee is charged. This fee is known as a debit transaction cost. The demat account holder must pay this fee at every fund withdrawal from their demat account. Usually, a fee is chargeable every time the individual sells shares, and the shares are withdrawn from the demat account. Sometimes, brokers also charge a flat fee for every transaction. Otherwise, some of the brokerage firms charge based on the percentage value of every transaction. 

Other Charges

There are other charges associated with demat accounts such as pledged fees and fee for updating personal information, i.e. address, mobile number, etc.; some brokerage firms also charge fees for portfolio modification.  

How to check demat account balance?

An investor can check their balance either through the CDSL portal or through an investor’s broker portal.

To check the balance through the CDSL portal, one can visit the  CDSL portal.

  • Enter the PAN to proceed
  • Enter Demat account number and sign in
  • Submit and enter the OTP sent to the registered mobile number to log in. 
  • Upon logging in, one can view their demat account statement. 

What is the attention investors facility provided by demat account?

Attention Investors is: (security alert for investors)

“Attention investors prevent unauthorized transactions in your trading / demat account ->Update your mobile numbers/email IDs with your stock brokers/depository participant. Receive information/alerts of your transactions directly from Exchange, all debit and other important transactions in your demat account directly from CDSL on your mobile/email at the end of the day.

“KYC is one-time exercise while dealing in securities market – once KYC is done through a SEBI registered intermediary ( broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary” ..Issued in the interest of investors. 


“No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment.No worries for refund as the money remains in the investor’s account.”

Which demat account is best for NRI?

There are many brokerage firms and banks that provide demat account facilities. With so many options, investors get confused about which one to choose. However, the following are the things to keep in mind while opening a demat account – 

  1. There is an ease of opening the account. It is always suggested to go through a SEBI registered intermediary depository. 
  2. One should also check for the expenses and maintenance charges of brokers. The one with low charges is good to go.
  3. There should also be a seamless interface between the bank account and demat account. Also, online trading should be effortless through websites or apps. 
  4. The depository participant should also provide analytics related to profitability, diversification, valuation and direct call of action to traders.
  5. The depository or broker should also provide some additional services that can differentiate them from others. 

Therefore, an NRI investor can decide which demat account is best for them based on these things. 

Do I need to get RBI approval before opening my Demat Account?

For an NRI to invest and trade in the stock market in India on a repatriation basis, it needs PIS permission letter from RBI. The PIS letter enables NRIs to buy and sell shares on the stock exchange in India. All these transactions are routed through the NRE bank account. Also, the bank in which you hold the NRI account helps you get this permission. 

On the other hand, if you plan to invest on a non-repatriation basis, you don’t need an RBI PIS permission. In such a case, you will just need an NRO account linked to a demat and trading account. 

Frequently Asked Questions

Can NRI open a joint NRI Demat account?

Yes, NRIs can open a joint NRI demat account to trade in equity. The PIS account, demat account and trading account will be in the first account holder’s name. The second account holder should also be an NRI. They should also submit the KYC documents along with FEMA declarations and FATCA. Most importantly, one can trade in securities markets, once KYC is completed. 

Are NRIs allowed investing in Exchange Traded Funds (ETFs)?

Yes, NRIs are allowed to invest in Exchange Traded Funds (ETFs) in India. They can invest on a repatriation basis as well as a non-repatriation basis.

Can NRI use demat account in India?

Yes, NRIs can open demat account in India. They would require a PIS (Portfolio Investment Scheme) approval from RBI. The PIS enables NRIs to buy and sell shares on the stock exchange in India.

How does your demat account update your mobile number?

To change your mobile number in your demat account, go to ‘Service Request’ or ‘Update Profile’ in your account. You can in your demat account update your mobile number or email ID.