Investing in a NRE Account
Modified on: Mon, 25 Jul, 2022 at 3:40 PM
TABLE OF CONTENTS
As per RBI Rules all investments in a NRE account should be funded from the PIS Bank account and it should be to the paise. For eg., if a purchase is made for Rupees 1091000.91, the funds should also received only to the tune of 1091000.91 and not a paise more or less. It is actually impossible to transfer funds to the paise before making an investment as the purchase value might slightly differ depending on the price, charges etc., To overcome this, you need not transfer funds to us before making a purchase.
All that you need to do is to fund your PIS Bank account. This PIS balance will be shared by the bank to us on a daily basis at the End of the Day and this amount - your ledger debit, if any, will be uploaded in your trading terminal on a daily basis. You may buy stocks based on it and the purchase obligation will be retrieved from the bank by us.
So kindly ensure that your PIS account is sufficiently funded on the previous working day itself.
PIS charges are debited by your bank on NRE transactions. Following are charges that could be applicable on your PIS Bank Account:
These charges can vary from one Bank to another. For latest updates please visit the NRI section of the respective bank's website.
The following are the activities carried out by the broker when you purchase a share:
The following are the activities carried out by the banker when you purchase a share:
The following are the activities carried out by the broker when you sell a share:
The following are the activities carried out by the banker when you sell a share:
The following transactions cannot be funded from the PIS Bank account. It has to be funded from the Non PIS or the Savings bank account.
Yes, investments in NRE mode are subject to limitations fixed in pursuant to SEBI guidelines. This is basically to monitor Foreign Investment limits in listed companies. Hence, the stocks where such limits are already hit or close to be hit, are restricted for fresh investments in NRE account. The list of such stocks are released by the Exchange from time to time. You may however invest in any stock without any restriction in a NRO account.
Added to this, you will also not be able to make Intraday trades, Buy Today and Sell Tomorrow (BTST) and funding transactions as these are not allowed in NRE mode. These are however, open for NRO accounts
The sale proceeds are credited by your bank to your account based on the contract notes that we send. The contract notes of every transaction is sent to the bank by us each time you execute a transaction. If you do not receive sale value credited to your bank account beyond T+2 days, it is possible that the bank does not have the corresponding purchase details.
Each time you execute a sale transaction, the bank will refer back to the purchase details such as date of purchase, rate of purchase, quantity etc., to compute tax. The tax amount payable, if any, will be deducted at source by the bank and only the remaining money, net off tax, will be deposited to your bank account. If for some reasons, the bank doesn't have the purchase details, they will not be able to deposit the amount to your bank account. You will then get an intimation on this and will be required to provide the necessary details for further processing.
It is very easy. You may do it online from your bank portal itself.