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A guide to Portfolio Investment NRI Scheme (PINS)
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Understand the need for a PINS account for an NRI
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Know the process to open a PINS account
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 September 30, 2024.
The Portfolio Investment NRI Scheme (PINS) is a Reserve Bank of India (RBI) scheme for Non-Resident Indians (NRIs)/Persons of Indian Origin (PIOs)/ Overseas Citizens of India (OCIs) that allows them to transact in the secondary markets in India with foreign funds deposited in their NRE accounts. Under this scheme an approval number is provided by an authorised dealer bank to an NRI for reporting their stock market transactions to RBI. The approval is provided on an NRE bank account number which is earmarked for the purpose of buy/sell done exclusively through stock exchanges. Funds in NRE PINS bank account are exclusively for transacting (both buy/sell). Reporting PINS transactions to RBI is done by the authorised dealer bank. You do not need a separate NRO (PINS) bank account for making investments with funds deposited in an NRO account.
How many PINS can an NRI have?
There can only be one PINS per NRI across banks. Only one NRE account earmarked for transacting in the stock market with foreign funds is permitted*.
There is no limit on the number of Non-PINS trading and demat accounts linked to NRO accounts, and NRE Non-PINS bank accounts. Each of the bank accounts held by the NRI (including NRE PINS, Non-PINS NRO and Non-PINS NRE) will be linked to unique demat and unique trading accounts.
Please note, an NRI can have only one PINS relationship with one authorised dealer bank at any single point of time. There is no limit on the number of Non-PINS NRE and NRO bank accounts that an NRI can hold.
*While one main bank account is earmarked for this approval number, some authorised dealer banks provide provisions of sub-accounts under this approval for availing services under Portfolio Management Services from profession fund managers.
Importance of a PINS account
As per RBI guidelines, under PINS an NRI cannot hold more than 5% in a company, the limit is 10% combined for all NRI fund holding in the company. PINS is a tracking mechanism, needed for investing directly through stock exchanges with foreign funds. Important to note that, investing in instruments like MFs, ETFs, IPOs can be done with Non-PINS accounts only.
Did you know?
The purpose of NRE Non-PINS linked trading and demat account is to invest in other instruments like mutual funds, ETFs, IPOs, ESOP exercise, Rights issue application etc.
Opening an account under PINS
You can open an account under PINS by approaching the specified branches of banks, authorised by the RBI to administer PINS accounts. You will need to provide the necessary documents, including proof of identity, proof of address, and proof of your NRI status at these designated bank branches to initiate the account opening process.
You should get in touch with your bank for more details.
To invest in the Indian stock market, you would need to link your NRI demat account with your Non-Resident External (NRE)/Non-Resident Ordinary (NRO) bank account.
- If you are investing through your NRE account, you will need a specific NRE (PINS) account. This will be distinct from your regular NRE bank account and is meant exclusively for trading and investing in the stock market. Please note, once you designate your NRE account as an NRE PINS account, you cannot use that account for any other banking related transactions
- If you are investing through your NRO account, you do not need a separate NRO (PINS) 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
*Foreign Exchange Management Regulations, 2016
Type of bank accounts for investment in different asset classes
Please note, tables are best viewed on desktops and in landscape mode on mobile phones.
| Asset classes | Account required |
|---|---|
Equity |
NRO account/NRE PINS account |
Derivatives (F&O) |
NRO account |
Mutual fund* (except USA/Canada) |
NRO/NRE NON PINS accounts |
Initial Public Offerings (IPOs) (except USA/Canada) |
NRO/NRE NON PINS accounts |
*NRIs from the USA and Canada may face restrictions on investing in Indian mutual funds with a few Asset Management Companies (AMCs) which may not be Foreign Account Tax Compliance Act (FATCA) or Common Reporting Standard (CRS) compliant. You should consult a professional fund manager for more details.
Repatriable and non-repatriable investments
As an NRI, you have the flexibility to repatriate funds* invested in the Indian stock market, along with any capital gains, subject to the limits of the account through which you have invested. If you have invested through your:
- NRE Non-PINS and NRE PINS account, then the sale proceeds are fully repatriable
- NRO account, then the proceeds are repatriable only up to USD 1 million** per financial year (April-March) subject to necessary documentation and tax compliances
*Such repatriation of funds, and investment pursuant thereto is subject to RBI mandates, including guidelines on sectoral caps.
**This USD 1 million limit is applicable for capital income sources. For current income sources, while there is no upper limit, it is subject to documentation and source of funds. You might want to get in touch with your bank to know more on this.
Overview of transacting in the Indian stock market basis your residential status
Please note, tables are best viewed on desktops and in landscape mode on mobile phones.
| Stocks bought | Purchase using | Hold (Demat) | Trading Account | Sale proceeds | Repatriation |
|---|---|---|---|---|---|
Bought as an RI and sold as a RI |
Savings Account |
RI Demat |
RI Trading Account |
Savings |
1 million USD supported by relevant documents as per RBI limits for a financial year |
Bought as an RI and sold as an NRI |
Savings Account |
NRO Demat |
NRO Non-PINS |
NRO Non-PINS account linked to demat |
150,000 USD supported by relevant documents as per RBI LRS limits for a financial year |
Bought as NRI and sold as an NRI |
NRO |
NRO Demat |
NRO Non-PINS |
NRO Non-PINS account linked to demat |
|
Bought as NRI and sold as an NRI |
NRE PINS |
NRE PINS Demat |
NRE PINS trading |
NRE PINS |
No restriction in repatriation |
Please note, taxation in all the above cases will be similar to tax applicable for RIs. This means, if the holding period is:
- Up to 12 months: Short-term capital gains (STCG) tax will be charged at 20% plus applicable surcharge and cess
- More than 12 months: Long-term capital gains (LTCG) tax will be charged at 12.5% plus applicable surcharge and cess
Conclusion
PINS is an RBI scheme that allows NRIs/PIOs/OCIs to invest in the Indian secondary markets from foreign funds deposited in their NRE accounts. You will need a specific NRE (PINS) account, distinct from your regular NRE bank account to invest.
You can open a PINS account by approaching the specified bank branches authorised by RBI and will have to link your NRI demat account to your NRE(PINS)/NRO account. You can only hold one PINS account at any given time. You should get in touch with your bank for more details.
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Disclaimer:
The contents of this article/infographic are meant solely for informational purposes. The contents are generic in nature and are not intended to serve as a substitute for specific advice on any matter whatsoever. The information is subject to updation, completion and verification and the applicable norms may keep changing materially from time to time. This information is also not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to applicable laws or would subject ICICI Bank Limited/its affiliates to any licensing or registration requirements. ICICI Bank Limited/its affiliates and their representatives shall not be liable for any direct or indirect losses or liability incurred arising in connection with any decision taken by any person on the basis of this content. Please conduct your own due diligence and consult your financial advisor before making any decision. Terms and conditions of ICICI Bank and third parties apply. ICICI Bank is not responsible for third party services. Nothing contained herein shall constitute or be deemed to constitute an advice, invitation or solicitation to avail any products/ services of third parties.
