Portfolio Investments Schemes

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You can now invest in equity shares and convertible debentures of Indian companies in the secondary market on a repatriation or non-repatriation through a registered stock broker on a recognized stock exchange in India under the Portfolio Investment Scheme (PINS). With the Kotak Group of financial services, your transactions are seamless across accounts. It is easier than ever to invest and earn from the Indian secondary market through a PINS account designed for NRIs by the Reserve Bank of India.

As per RBI guidelines, NRIs should have a separate bank account exclusively for PINS purposes and all transactions relating to shares purchased or sold should be routed through this account and it should not be allowed to carry any other transaction which is not related to trading of shares.

  1. It is available in both NRE as well as NRO accounts
  2. AQB waived account
  3. Free Net Banking (only view rights) access from anywhere and anytime across globe
  4. Cheque book is issued (only in Offline PINS set up)
  5. Mandate facility is available (only in Offline PINS set up)
  6. Joint holding is permissible
 

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What is Portfolio Investment Scheme (PINS)?

Portfolio Investment Scheme (PINS) allows Non Resident Indians (NRIs) or Persons of Indian Origin (PIO) to invest in shares or convertible debentures (sale or purchase) of an Indian company in the secondary market on repatriation or non-repatriation basis through registered stock broker on a recognized stock exchange, subject to terms and conditions as specified in FEMA.

Does an NRI/PIO require PINS account to purchase shares in primary market (IPOs) on repatriable basis?

No, PINS account is mandatory only once the transactions are routed through secondary market. In case of purchase of shares in primary market on repatriation basis, the application money can be paid through NRE accounts or inward remittance through normal banking channel.

Does an NRI/PIO require PINS account to purchase shares in primary market (IPOs) on non- repatriable basis?

No, PINS account is mandatory only once the transactions are routed through secondary market. In case of purchase of shares in primary market on non-repatriation basis, the application money can be paid through NRE/NRO accounts or inward remittance through normal banking channel.

Does an NRI require PINS account to sell shares, purchased in primary market (IPOs) on repatriable/non-repatriable basis?

No, NRIs don’t require PINS account to sell shares, purchased in primary market (IPOs) on repatriable/non-repatriable basis.

Does an NRI require PINS account to sell shares which were allotted as rights/bonus on the shares originally purchased from primary market (IPOS) on repatriable/non-repatriable basis?

No, NRIs don’t require PINS account to sell shares, which were allotted as rights/bonus on the shares originally purchased from primary market (IPOS) on repatriable/non-repatriable basis.

What will happen to the shares purchased in primary market/secondary market as a resident Indian, once the customer turns Non-Resident?

The shares purchased in primary/secondary market as resident Indian will be held on non-repatriable basis. On becoming NRI, the customer has to open a non-repatriable demat account and transfer all the shares bought and held from resident demat account. 

How many Designated Banks can an NRI appoint?

NRI/PIO can appoint only one designated bank for the purpose of routing the transactions under PINS (Portfolio Investment Scheme is the permission that an NRI/PIO requires to trade in the Indian stock market. An NRI can have only one PINS account at any point in time).

Is there any limit for investment in shares/convertible debentures by an NRI in the secondary market?

Yes, there is a limit for investment in shares/convertible debentures by an NRI in the secondary market.
Each NRI can invest in shares/convertible debentures either on a repatriation or non-repatriation basis using Portfolio Investment Scheme route, which shall not exceed 5% of the paid up value of shares/convertible debentures in each series, issued by the companies. This must fall within overall permissible limits and is subject to compliance with RBI (Reserve Bank of India) guidelines, which may change from time to time. Apart from that, the aggregate paid-up value of shares/convertible debentures in each of any company purchased on repatriation or non-repatriation basis by NRIs does not exceed 10 percent of the paid up capital of the company.

What are the general regulations regarding NRI trading in secondary market?

Regulations regarding NRI Trading:

  • Intraday (i.e. buy and sell on the same day) trading is not allowed for NRI clients. Therefore, the NRI investor has to take delivery of the shares purchased and give delivery of shares sold.
  • Each sale transaction will be credited to client account net of tax. Hence, for every sale transaction capital gains will be calculated. At present, the client would be charged a short-term capital gains tax of 15 percent (plus applicable cess) on the gains, whereas long term capital gains tax is NIL.
  • TDS (Tax deducted at source) certificates will be issued by the bank and certificate charges will be levied for each sale transaction.
  • No set off will be allowed but while filing returns the client can claim set off against the TDS deducted.
Transaction covered under Portfolio Investment SchemesTransactions excluded from Portfolio Investment Schemes
  • Shares purchased through secondary market
  • Stock Split
  • IPO
  • Bonus
  • Rights
  • ESOPs
  • Shares acquired on conversion of ADRs/GDRs
  • Shares acquired under Direct Investment Schemes
  • Shares purchased outside India from other NRI/OCB
  • MF/Insurance Investments

Disclaimer

Online PINS investment services are available to NRIs in all countries, except those based in USA and Canada.
PINS account can be opened by NRIs only during their visit to India.

Permissible Credits in PINS accounts

  • Inward Remittance through normal banking channels for the purpose of purchase of shares and convertible debentures (Debenture transactions are not reported through PINS). The purpose of remittance shall be investments.
  • Transfer from own (or self) NRE/FCNR/NRO Accounts. (Transfer from NRE/FCNR accounts, if the shares are purchased on repatriation basis or Transfer from NRE/FCNR/NRO, if the shares are purchased on non-repatriation basis). 
  • Sale proceeds of the shares acquired under PINS and sold on the stock exchange through a registered broker.

Permissible Debits in PINS accounts

  • Transfer to own (or self) NRE/FCNR/NRO Accounts (Transfer to NRE/FCNR/NRO accounts, if investments are done on repatriation basis or Transfer to NRO account, if the investments are done on non-repatriation basis).
  • Amount paid on account of purchase of shares on stock exchange/secondary market through a registered broker.
  • Margin money to broker as per SEBI requirements.
  • Any charges such as brokerage, STT, DP charges, PINS Transaction Charges etc.

Note

  • Dividend Income cannot be credited only clients Savings account NRE/NRO basis PINS account which was opened with the bank.
  • Client cannot have only PINS account with the bank, he needs to open savings bank account with corresponding PINS account (Repatriation/Non-Repatriation)

To open a Portfolio Investment Scheme (PIS) Account, the customer has to visit any designated bank that is authorized to issue PINS permission letter on behalf of Reserve Bank of India. Kotak Mahindra Bank is one of the designated banks.

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