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The below content is purely for informational purposes and is not intended to constitute advisory of any kind. Please note, these are in-depth articles which are best viewed on large screen devices like laptops, desktops and tablets. The position reflected in this article has been updated as of February 15, 2024.

As per the prevailing Foreign Exchange Management Act (FEMA) regulations, once you become a Non-Resident Indian (NRI), your investments in India remain intact. This article discusses the implications of your residency status on your demat account in India.


Do you need to close your resident demat account?

As an NRI, if you hold a demat account in India, you will need to inform your broker, bank, or Depository Participant (DP) about the change in your residency status. As per the prevailing Securities and Exchange Board of India (SEBI) regulations, it is mandatory to:

  • Close your existing demat account and
  • Open a new NRI demat account.

While opening a new NRI demat account, you will need to submit a fresh application and relevant documentation for Know Your Customer (KYC) compliance. Subsequently, the securities held in your resident demat account will be transferred to a new NRI (Non-Resident Ordinary (NRO)) demat account. You can hold them on a non-repatriable basis.

Open NRI demat account

In order to transact in the secondary markets, NRIs need to open a Non-Resident External (NRE) account under the Portfolio Investment NRI Scheme (PINS) to route their investments. You can open a single designated PINS account with specified branches of banks authorised by the Reserve Bank of India (RBI) to deal in portfolio investment.

You can opt for only one authorised dealer bank to invest in India under the PINS route and have only one PINS account at any given time.  Please note, once you designate your NRE bank account as a PINS account, you cannot use it for other banking-related transactions.

Did you know?

You do not need to have a separate NRO account for trading and investment purposes. While NRIs also needed an NRO PINS account previously, according to recent RBI guidelines, this is no longer needed. However, you will need to link your NRI demat account to this NRO account.


Types of demat accounts available to NRIs

You can hold your investments in stocks and other tradeable securities in India either on a repatriable or non-repatriable basis.

SEBI mandates you to use separate demat accounts for investments based on a repatriable and non-repatriable basis, i.e., you will need to have an NRO demat account for making investments on a non-repatriable basis and an NRE demat account for making investments on a repatriable basis.

If you invest from your NRE account, then all proceeds are fully repatriable.

However, if you wish to invest from your NRO account, then the proceeds are repatriable only up to USD 1 million cumulatively for all NRO accounts held in India per Financial Year (April-March).

To understand the difference between NRE and NRO accounts, click here.


Once you become an NRI and plan to continue investing in India, you will have to close your existing resident demat account and open a new NRI demat account under PINS. You need to open separate demat accounts for repatriable and non-repatriable investments. You can hold securities purchased as a resident Indian, on a non-repatriable basis. You should get in touch with your bank/broker for more details.

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Frequently Asked Questions

What will happen to my demat account when my status changes from an NRI to a resident Indian?

Once your residency status changes to a resident Indian, your NRI demat account will be closed and you will have to open a new resident demat account. The securities held in your NRI demat account will be transferred to the newly opened resident demat account as per SEBI guidelines.


What will happen to my demat account on the unfortunate demise of one or all of the joint holders? 

As per SEBI, in case of an unfortunate demise of the primary holder of the NRI demat account, the securities held within the demat account will be shifted to the account of the surviving holder(s). However, if the primary holder and all joint holders pass away, the securities will be transferred to the designated nominee(s). The nominee(s) must have their own active demat account to which the securities will be credited.


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