Investing norms for NRIs

Non-Resident Indians (NRIs) are allowed to invest in mutual funds in India. We answer some queries on the investing norms for NRIs.

Can a non-resident Indian (NRI)/person of Indian origin (PIO) invest in mutual funds? Can NRIs from any country invest?

Yes. NRIs and PIOs can invest in Indian mutual funds. However, some mutual funds may not allow NRIs from certain countries to invest. Read the Scheme Information Documents/ Statements of Additional Information for this information or contact the mutual funds.

Please explain the investment guidelines.

NRIs can invest in Indian mutual funds through their NRE/NRO/FCNR accounts. The investment has to be made in Indian Rupees only. They may also send a Rupee cheque from abroad payable in a bank in India.

The investor status in the form should be marked as NRI and the bank details of his/her NRE/NRO account have to be mandatorily provided.

For an NRI to invest, it is mandatory that he/she maintains a bank account in India. AMCs do not accept an NRI application with an overseas bank account. NRIs should be KYC Compliant to invest in a mutual fund.

Can NRIs invest on a repatriable basis?

To invest on a repatriable basis, the amount representing investment should be received by inward remittance through normal banking channels (cheque/Rupee denominated DD if from an overseas account) or by cheque drawn on or debited to an NRE/ FCNR account of the non-resident investor along with FIRC.

Redemption proceeds/ dividends will be credited to the NRE bank account or paid out by cheque in Indian Rupees. The redemption proceeds and dividend can be repatriated in full.

How can an NRI redeem investments?

Redemption proceeds can be processed by submitting the redemption request form. The proceeds will be paid by cheque or credited to the first unit holder’s bank account registered in the mutual fund folio.

What is the process for bank mandate registration and change?

An NRI can register upto 5 NRE/ NRO bank account(s) in the folios for receipt of redemption or dividend proceeds. Change in existing bank mandate will be allowed from NRE to NRO/SB account and not vice versa.

Can a Power of Attorney (POA) holder invest on behalf of the NRI investor?

Yes. A POA holder has the authority to invest on behalf of an NRI and sign documents for first and additional purchases as well as redemptions.

While subscribing for units the POA holder should submit the original POA or a duly notarised copy of the same.

The same will be registered in the folio.

Is nomination by NRIs allowed in Mutual Funds?

Yes, NRIs may make a nomination and also be nominees in folios of mutual funds.

(Contributed by CAMS Viveka, Investor Education Team of CAMS. Views expressed are general practices in MF industry and may vary on a case-to-case basis).

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