How can an NRI open a Demat Account?
A Demat Account is used to hold the shares, bonds, mutual funds and other securities of publicly traded companies in an electronic form. Similar to a bank account, a Demat Account is either credited or debited, each time a person buys or sells shares of a company / companies.
An NRI or a POI can open a Demat account with any Depository Participant, which can be a bank, financial institutions or brokerage house. For NRI Stock, it is required to select type of NRI Demat Account – Repatriable and Non-Repatriable, depending on the requirement for transferring funds outside India. Further, it is required to maintain separate Demat Accounts for repatriable and non-repatriable investments.
No specific permission is required from the RBI for opening the Demat Account for NRI or for the dematerialisaion / rematerialisation of securities or for subscribing to public issue/ rights / bonus shares. However, requisite permissions of the designated AD Bank may be required for the debits / credits in the Demat account.
A subsequent change of residential status from Non-Resident to Resident will require opening of a new Demat account in India with Resident status. The NRI Demat account can be closed after transferring the securities from the NRI Demat account to the Resident Demat account. It is the responsibility of the NRI to intimate the status change to the AD Bank and the Depository Participant.