Account Variants: NRI accounts

Why this page is structured this way: An NRI account is not a resident account with a passport attached. Three separate legal frameworks decide what it can do — FEMA decides whether money may cross the border, SEBI decides what may be traded, and the Income-tax Act decides what is withheld — and each one has its own definition of the same client. The page settles residence first, then the bank-account architecture the routes are built on, then the route choice, then the segment and tax consequences, then the mechanics that break for a client who is not in India.

TL;DR

• Residence is defined twice. FEMA decides which investment schedule applies; the Income-tax Act decides withholding. The two tests use different day counts, and a client can change one status without changing the other.
• The bank architecture drives everything else. NRE holds repatriable funds, NRO holds India-sourced funds. Because repatriability must be traceable per holding, an NRI normally maintains two demat accounts with distinct depository sub-statuses.
• PIS versus non-PIS is a routing decision, not a product tier. PIS runs listed-equity purchases through a designated Authorised Dealer Category-I branch that monitors limits and reports; non-PIS on NRO funds has no designated-branch monitoring and no repatriation beyond the general NRO allowance.
• Individual non-resident access widened on 12 June 2026. RBI/2026-27/114 (15 June 2026) permits AD Category-I banks to open repatriable INR accounts for individual persons resident outside India investing under Schedule III, extending the route beyond NRIs and OCIs.
• The CP code is gone. SEBI/HO/MIRSD/MIRSD-PoD/P/CIR/2025/109 (29 July 2025) removed the Custodial Participant code and single-clearing-member requirement for exchange-traded derivatives; NRI limits are monitored as client-level limits.
• Verification mechanics break, not the verification standard. Aadhaar e-KYC and Aadhaar e-Sign cannot be assumed abroad, so the requirements of SEBI/HO/MIRSD/SECFATF/P/CIR/2023/169 (12 October 2023) are met through video IPV, attested documents or a DSC.

Conceptual overview

Two questions decide an NRI account, and they are frequently confused. May this person’s money enter and leave India, and under which schedule of the Foreign Exchange Management (Non-debt Instruments) Rules, 2019? And what may this person trade, under whose monitoring? FEMA answers the first, SEBI and the exchanges answer the second, and the answers meet at one place — the bank account through which pay-in and pay-out settle.

That is why the bank-account architecture, not the trading account, is the design centre of an NRI onboarding. An NRE (Non-Resident External) rupee account holds funds remitted from abroad and is repatriable; an NRO (Non-Resident Ordinary) rupee account holds India-sourced income — rent, dividends, pension, sale proceeds of pre-existing assets — and is repatriable only within the general remittance allowance RBI permits from NRO balances. Once money has been mixed, its repatriability cannot be reconstructed, so the market never mixes it: separate bank accounts, separate demat accounts, separate ledgers, and a repatriability flag on every holding. The depository encodes this as distinct beneficial-owner sub-statuses — see CDSL BO master destination.

The Portfolio Investment Scheme sits on top of the repatriable side. Under Schedule III of the NDI Rules, a non-resident individual investing in listed Indian equity on a repatriation basis routes the investment through a designated Authorised Dealer Category-I branch, which holds the designated account exclusively for those investments, monitors the shareholding ceilings, and reports to RBI. The broker sees a permission letter and a settlement instruction; the bank carries the monitoring obligation. The non-PIS route dispenses with the designated branch by dispensing with repatriability: investment from NRO funds on a non-repatriation basis is treated as domestic investment, so there is no scheme to be admitted to.

Everything else here is downstream of those two facts. Segments differ because delivery-based purchase is what Schedule III contemplates; tax differs because withholding applies to a non-resident’s gains; verification differs because the client is not standing in front of anyone. The rest of the relationship is unchanged — see Broker process narrative.

1. Regulatory framework

• Foreign Exchange Management (Non-debt Instruments) Rules, 2019 — the governing instrument. Schedule III covers purchase of listed equity by a non-resident individual on a repatriation basis through the Portfolio Investment Scheme; Schedule IV covers purchase on a non-repatriation basis, treated as domestic investment. [not yet in index]
• Foreign Exchange Management (Non-debt Instruments) (Third Amendment) Rules, 2026, notified as S.O. 3030(E) on 12 June 2026 — substitutes “an individual” for “non-resident Indian or overseas citizen of India”, opening Schedule III to individual persons resident outside India generally, with a land-border proviso requiring prior government approval where the investment results in control or beneficial ownership by citizens of a land-border country. The ceilings were revised at the same time; read the gazette notification before relying on any ceiling figure. [not yet in index]
• RBI/2026-27/114 (15 June 2026) — AD Category-I banks may open repatriable INR accounts for individual persons resident outside India investing under Schedule III; banks retain the existing NRI and OCI reporting and limit-monitoring approach. Immediate effect.
• RBI/2026-27/254 (8 September 2026) — withdraws seven obsolete FEMA circulars listed in its annex; a reminder to re-check FEMA citations rather than copy them forward.
• SEBI/HO/MIRSD/SECFATF/P/CIR/2023/169 (12 October 2023) — KYC master circular. The standard does not relax for a non-resident; the means of meeting it change.
• SEBI/HO/MIRSD/SECFATF/P/CIR/2024/78 (6 June 2024) — AML/CFT guidelines. Cross-border and non-face-to-face onboarding raise the due-diligence bar rather than lowering it.
• SEBI/HO/MIRSD/MIRSD-PoD/P/CIR/2025/109 (29 July 2025) — removes the mandate for an NRI to obtain a CP code and deal with a single clearing member; NRI positions are monitored as client-level positions. Existing clients could exit the CP-code arrangement on an email request.
• SEBI/HO/MIRSD/SECFATF/P/CIR/2024/12 (20 February 2024) — centralises FATCA and CRS self-certifications at the KRAs, effective 1 July 2024; the intermediary remains responsible for the reasonableness check. Binding on every account with a foreign tax residence. See Section J.
• NSE/ISC/61817 (30 April 2024) — UCC master circular; residential status and client category fields, and the segment activation flags.
• CDSL/OPS/DP/POLCY/2026/433 (30 June 2026) — confirms that quarterly BSDA eligibility assessment covers NRI and foreign-national accounts as well as resident individuals.

The two residence tests are not the same test

FEMA residence turns on intent and period of stay for a purpose indicating an indefinite stay; income-tax residence turns on prescribed day counts, with separate rules for deemed residence and for “resident but not ordinarily resident”. In a transition year a client can be a person resident outside India under FEMA while being taxed as a resident, or the reverse. Capture both as separate fields with separate evidence and never derive one from the other. The specific error to avoid is treating the FATCA/CRS self-certification as a FEMA determination — it establishes tax residence and nothing else.

2. The account architecture

Layer	Repatriable side	Non-repatriable side
Bank account	NRE rupee account at an AD Category-I bank	NRO rupee account at an AD Category-I bank
Source of funds	Inward remittance from abroad; transfer from another NRE or FCNR account	India-sourced income and permitted local receipts
FEMA schedule	Schedule III, through the Portfolio Investment Scheme	Schedule IV, non-repatriation basis, treated as domestic investment
Designated branch	Required; holds the designated account exclusively for these investments and reports to RBI	Not applicable
Demat account	Separate BO account with the repatriable NRI sub-status	Separate BO account with the non-repatriable NRI sub-status
Repatriation	Sale proceeds repatriable, subject to tax clearance and the scheme’s conditions	Only within RBI’s general remittance allowance from NRO balances, with the prescribed certification
Typical use	Fresh money from abroad intended to come back out	India-sourced money, and any activity the repatriable route does not support

The two-account structure is the architecture, not an option: it makes repatriability a property of the account rather than a reconstruction from transaction history. A broker that maps both NRE and NRO settlement to one demat account has built an unreconcilable ledger, and the error surfaces when the client first tries to repatriate.

3. PIS versus non-PIS

Dimension	PIS route	Non-PIS route
FEMA basis	Schedule III, repatriation basis	Schedule IV, non-repatriation basis
Funding account	NRE (and NRO where the client runs a non-repatriable PIS variant offered by the bank)	NRO
Designated AD branch	Required; one designated account per client for the scheme	Not required
Limit monitoring	The designated branch monitors the individual and aggregate shareholding ceilings and reports	No scheme-level monitoring; the general ceilings still bind the issuer side
Permission letter	Required from the AD bank; broker-agnostic, reusable across brokers	None
Equity delivery	Permitted	Permitted
Intraday and short selling	Not available — the scheme contemplates delivery-based purchase and sale	Not available on the same basis; the constraint is the delivery requirement, not the route
Exchange-traded derivatives	Not the route used; derivatives run off NRO non-PIS funds	Available, on non-repatriable funds, after the CP-code removal
Repatriation of proceeds	Yes, subject to the scheme’s conditions and tax	Only under the general NRO remittance allowance
Bank charges	PIS account maintenance and per-transaction charges levied by the AD bank	No PIS charges

Both routes exist because they solve different problems. A client moving overseas savings into Indian equities and intending to take the proceeds home needs Schedule III, and accepts the designated-branch monitoring and the bank’s charges. A client whose Indian income accumulates in an NRO account, or who wants exchange-traded derivatives, takes the non-PIS route and accepts that the money largely stays in India.

One PIS letter, many brokers

The PIS permission is a relationship between the client and the AD bank, not the broker. A client with an existing letter does not need a new one to add a second broker; the broker is added to the designated account’s mapping. Onboarding flows that treat the letter as a per-broker document create avoidable delay, and only the bank can confirm the current mapping.

4. Who qualifies

Client type	Position
NRI holding an Indian passport	The base case. Eligible on both routes
Overseas Citizen of India	Eligible on both routes. The PIO card scheme was merged into OCI [verify current position with the issuing authority]
Foreign national who is not an NRI or OCI	Repatriable Schedule III access opened up by the June 2026 amendment and RBI/2026-27/114, subject to the land-border proviso and the AD bank’s systems
Person resident in Nepal or Bhutan	Distinct treatment under the NDI Rules; do not infer from the general NRI position [verify]
Non-resident who is also a US or Canadian tax resident	Eligible, but many Indian mutual funds restrict or refuse them for FATCA-compliance reasons — a fund-level restriction, not a securities-market rule [industry practice — unverified]

5. Documents and verification

Document	Verification method	Mandatory
PAN	PAN validation; name and date-of-birth match	Yes
Passport, relevant pages	Attested copy or verified original	Yes
Visa, residence permit or work permit	Attested copy	Yes, for the residence determination
OCI card	Attested copy	Conditional
Overseas address proof	Utility bill, lease, bank statement or equivalent per the KYC master circular	Yes
Indian address proof	Per the KYC master circular	Conditional, where an Indian correspondence address is retained
NRE or NRO bank proof	Bank statement or cancelled cheque, plus account verification	Yes
PIS permission letter	Original or bank-confirmed copy	Yes, on the PIS route only
FATCA and CRS self-certification	Self-certification with a reasonableness check against the collected indicia	Yes
Tax Residency Certificate	Issued by the foreign tax authority	Conditional, where treaty benefit is claimed
In-person verification record	Video IPV, or attestation by a permitted authority abroad	Yes

5.1 In-person verification and signing from abroad

The obligation is unchanged; the mechanism has to be chosen from what is actually available to a client outside India:

1. Video in-person verification. The primary route: a recorded session capturing the client with the original documents, geotagged and time-stamped per the KYC master circular’s VIPV conditions. See Section N.
2. Attestation abroad. Where VIPV is not usable — documents attested by an Indian embassy or consulate, a notary public, a court magistrate or judge, or an authorised official of an overseas branch of a scheduled commercial bank registered in India.
3. Signing. Aadhaar OTP e-Sign needs a live Aadhaar with a reachable registered mobile, which many NRIs lack. A DSC is the standard alternative and wet signature with attestation the fallback. Build all three rather than discovering the gap at the e-Sign screen — see Journey: review and e-Sign.

6. Field-level deltas

name	type	length	mandatory	source-system	destination-system(s)	notes
Residential Status	Code	2	Yes	Residence determination	KRA, UCC, BO master, back office	Site code table uses RI / NRI / FN / PIO; drives client type
NRI Sub-Status	Code	2	Yes	Classification	CDSL BO master	Repatriable and non-repatriable are different values; see CDSL BO destination
UCC Client Category	Code	2	Yes	Approved classification	NSE, BSE and MCX UCC	NR in the site code table; the exchange annexures also use numeric encodings [unknown — verify]
Passport Number	Alphanumeric	per document	Yes	Passport	Back office, KRA	Expiry must be tracked; an expired passport is a re-KYC trigger
Passport Expiry	Date	8	Yes	Passport	Back office	Drives the document-refresh workflow
Country of Residence	Code	2	Yes	Address evidence	Back office, FATCA/CRS, AML reporting	ISO 3166-1 alpha-2
Overseas Address and country	Text	per destination	Yes	Address evidence	Back office, FATCA/CRS, AML	Also the CRS account-holder address; see Section V
NRI Trading Route	Code	2	Yes	Route decision	Back office, RMS, regulatory reports	PIS or non-PIS; the RMS reads it to enforce the delivery-only constraint
Repatriation Status	Code	2	Yes	Account architecture	Back office, RMS	Repatriable or non-repatriable; drives the ledger bucket and the margin envelope
PIS Bank Name	Text	per destination	Conditional	PIS letter	Back office	Prints on the NRI account-statement header
PIS Account Number	Alphanumeric	per destination	Conditional	PIS letter	Back office	Designated AD-bank account; the settlement route
PIS Permission Status	Char	1	Conditional	PIS letter verification	Back office	Gates the repatriable-route ledger flag
NRE / NRO Account Type	Code	3	Yes	Bank proof	Back office, CDSL and NSDL BO master	Settlement routing; the depository validates it against the NRI sub-status
SWIFT Code	Alphanumeric	11	Conditional	Bank proof	AML reporting	Required on the foreign leg of a cross-border wire report
Tax Residency Certificate	Document	—	Conditional	Foreign tax authority	FATCA/CRS records	Supports a treaty-rate claim

7. Segments and what the client can actually do

Segment	Repatriable PIS route	Non-repatriable non-PIS route
Equity delivery, cash segment	Available	Available
Intraday and same-day square-off	Not available	Not available
Short selling	Not available	Not available
Exchange-traded equity derivatives	Not the route	Available on NRO funds; no CP code required since SEBI/HO/MIRSD/MIRSD-PoD/P/CIR/2025/109
Currency derivatives	Not available on the ordinary retail non-resident route [verify]	Not available on the ordinary retail non-resident route [verify]
Commodity derivatives	Not available on the ordinary retail non-resident route; where permitted at all, through specified routes [verify]	Same
IPO and public issues	Available, through the non-resident application category	Available, on a non-repatriation basis
Mutual funds	Available, subject to fund-level restrictions on some tax residences	Available, same caveat
Margin Trading Facility	Offered selectively; a broker policy matter [industry practice — unverified]	Same. See MTF operational

The delivery-only constraint surprises clients and is not a broker preference: it follows from what a purchase on a repatriation basis under Schedule III contemplates — an acquisition that is delivered and held — and it must be enforced at pre-trade, because a rejection after execution is a compliance problem rather than a control. Segment rules comparison sets out the framework this sits inside.

8. Tax at the account level

Withholding at source on a non-resident’s gains is the structural difference from a resident account. On the PIS route the AD bank customarily computes and withholds on the capital gain before crediting sale proceeds to the designated account, relying on the acquisition data the client and broker supply; on the non-PIS route the arrangement depends on the bank and broker setup. Either way the broker must supply accurate trade and cost data, reflect the correct route and repatriability on the ledger, and hold the Tax Residency Certificate where a treaty rate is claimed. Rates, holding periods and exemption limits for listed equity were revised by the Finance (No. 2) Act, 2024 and change with each Finance Act; do not hard-code them from this page. [AI inference — verify before acting]

9. Alternatives

Option A	Option B	When to pick which	Who uses what
PIS on NRE funds	Non-PIS on NRO funds	A where the money must be able to leave India again; B where it is India-sourced or derivatives access matters	A dominates fresh-remittance investing; B dominates NRO-balance deployment [industry practice — unverified]
Two demat accounts	One account for the single route actually used	Two where the client will use both routes	Two is the safe default: adding the second later is an account opening; mixing the first is unrecoverable
Broker-direct derivatives	A retained custodian arrangement	Direct for a retail non-resident; custodian for institutional-style clearing	The July 2025 change made direct the normal case
VIPV	Attestation abroad	VIPV where bandwidth, original documents and time zones allow; attestation where VIPV fails	VIPV is the default; attestation is the fallback with a multi-week tail

Practical notes

• [gotcha] The PIS letter is the longest lead-time item in an NRI onboarding and the broker cannot shorten it. Start it in parallel with document collection, not after KYC approval; the AD bank’s designated branch sets the clock, as it does in Lifecycle: NRI conversion.
• [gotcha] A client who moved abroad and never said so is running a resident account in a non-resident’s name, and the broker has no reliable detector — FATCA and CRS self-certification answers a different question. Periodic re-KYC and address changes are the practical detection points; see Lifecycle: re-KYC.
• [gotcha] Penny-drop name matching fails more often on NRI accounts, because transliterations, dropped middle names and surname-first conventions all appear in overseas-linked bank records. Budget for manual review rather than treating a mismatch as fraud — see Journey: bank account.
• [industry practice] Where the client holds both a repatriable and a non-repatriable account, keep the client code, ledger and contract-note series distinct per route. Merging them for reporting convenience destroys the audit trail the architecture exists to preserve.
• [risk trade-off] The CP-code removal made non-resident derivatives simpler to offer and no less risky: margined positions held in another time zone, often outside the margin-call window. Set the intraday monitoring and square-off policy deliberately rather than inheriting the resident default.
• [cost optimization] PIS charges are levied per transaction as well as annually, so the PIS route is materially more expensive for a client who trades frequently in small sizes. For an India-sourced buy-and-hold portfolio, non-PIS is usually cheaper — the trade-off is repatriability, not execution quality.
• [AI inference — verify before acting] The Schedule III individual and aggregate ceilings were revised in June 2026 and the figures in secondary commentary do not all agree. Read the gazette notification and the AD bank’s confirmation before stating a ceiling to a client.

Cross-references

• Account variants overview — the selector table across all eleven variants.
• Appendix: NRI deep dive — the earlier vendor-by-vendor note; this page carries the current process and route detail.
• Lifecycle: NRI to resident conversion — the status-change walkthrough for an existing client.
• Section V: NRI-specific fields — every NRI field with its destinations.
• Section J: FATCA and CRS — self-certification data and where it flows.
• Segment rules comparison — the framework the NRI restrictions sit inside.
• NSE vendor spec — UCC registration and segment activation flags.
• BSDA — NRI accounts sit inside the quarterly BSDA eligibility assessment.
• Bank-led 3-in-1 accounts — what changes when the group bank is also the client’s AD bank.

Verified through

2026-09-11

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AI-generated and not legal, financial, or compliance advice. See the project README for full disclaimer.