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Business Model

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NRI meaning and types :

i. Non-Resident Indian (NRI) : NRI means a person resident outside India who is a citizen of India or is a person of Indian Origin.

ii. Person of Indian Origin (PIO) : PIO means :

a. Who at any time, held an Indian passport; or

b. He/she or either of his/her parents or his/her grandparents was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955) or

c. The person is a spouse of an Indian citizen or a person referred to in clause (a) or (b) above.

iii. Overseas Citizen of India (OCI): OCI means a foreign national, who was eligible to become a citizen of India on 26.01.1950 or was a citizen of India on or at anytime after 26.01.1950 or belonged to a territory that became a part of India after 1.08.1947 and his/her children and grandchildren, is eligible for registration as an OCI. Minor children of such person are also eligible for OCL. However, if the application had ever been a citizen of Pakistan or Bangladesh he/she will not be eligible for OCI.

Types of Investments that can be done by NRI :

1) Non-PIS:

* Mutual Funds (MF)

* Initial Public Offer (IPO)

2) PIS :

Portfolio Investment Scheme (PIS) allows NRI to invest in shares of Indian Companies, in secondary market, under repatriation or non-repatriation basis in respect of shares or convertible debentures sold or purchased through a registered stock broker on a recognized stock exchange. NRI to open separate PIS account (NRE/NRO) for the purpose of investments in secondary market on repatriation & non-repatriation basis respectively apart from maintaining savings NRE/NRO account. NRI to authorize the Bank to debit their SF account under NRE/NRO for transfer of funds to their PIS account as and when required , towards purchase of shares through secondary market and for recovery of Bank charges etc. Bank will issue Pay Order/Draft in favour of the Broker authorized by NRI, based on the contract nore submitted by them to the debit of PIS account.

Reserve Bank has authorised a few branches of each authorised bank/dealer to conduct the business under Portfolio Investment Scheme on behalf of NRI's. These branches are the main branches of major commercial banks, NRI's will have to route their applications through any of the designated authorised dealer branches who have authorisation from Reserve Bank.

Investment Options available to NRI's

* NRI's can trade in primary market and secondary market on repatriable and non-repatriable basis.

* NRI's can I,nvest in the primary market out of funds held in NRE or NRO accounts.

* Investments in secondary market can be done only through funds held in NRE or NRO PIS account.

* NRI's can do only delivery based trading i.e. no intraday trading is allowed to them

* NRI's can also invest in the derivative (F&O) segment, but only through funds held in NRO accounts

Business Opportunity :

Recent Trends :

PNB's Share in NRI A/c's Visa-Vis Other Banks :

Scheme | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 |

FCNR | 191 | 207 | 220 | 261 | 276 | 248 |

NRE | 481 | 461 | 468 | 531 | 624 | 509 |

| | | | | | |

Percentage | | | | | |

FCNR | 1.74 | 1.81 | 1.68 | 1.73 | 1.95 | 1.88 |

NRE | 2.34 | 2.17 | 2.12 | 2.17 | 2.34 | 2.16 |

RBI Regulations with regards to NRI's Investments:

A Non-resident Indian (NRI) or an Overseas Corporate Body (OCB) may purchase/sell shares and/or convertible debentures of an Indian company, through a registered broker on a recognised stock exchange, subject to the following conditions :

i) the NRI/OCB designates a branch of an authorised dealer for routing his/its transactions relating to purchase and sale of shares/ convertible debentures under this Scheme, and routes all such transactions only through the branch so designated;

ii) the paid-up value of shares of an Indian company, purchased by each NRI or OCB both on repatriation and on non-repatriation basis, does not exceed 5 percent of the paid-up value of shares issued by the company concerned;

iii) the paid-up value of each series of convertible debentures purchased by each NRI or OCB both on repatriation and non-repatriation basis does not exceed 5 percent of the paid-up value of each series of convertible debentures issued by the company concerned;

iv) the aggregate paid-up value of shares of any company purchased by all NRIs and OCBs does not exceed 10 percent of the paid up capital of the company and in the case of purchase of convertible debentures the aggregate paid-up value of each series of debentures purchased by all NRIs and OCBs does not exceed 10 percent of the paid-up value of each series of convertible debentures;

Provided that the aggregate ceiling of 10 per cent referred to in this clause may be raised to 24 per cent if a special resolution to that effect is passed by the General Body of the Indian company concerned;

v) the NRI or OCB investor takes delivery of the shares purchased and gives delivery of shares sold;

vi) payment for purchase of shares and/or debentures is made by inward remittance in foreign exchange through normal banking channels or out of funds held in NRE/FCNR account maintained in India if the shares are purchased on repatriation basis and by inward remittance or out of funds held in NRE/FCNR/NRO/NRNR/NRSR account of the NRI/OCB concerned maintained in India where the shares/debentures are purchased on non-repatriation basis;

vi) the Overseas Corporate Body (OCB) informs the designated branch of the authorised dealer immediately on the holding/interest of NRIs in the OCB becoming less than 60 per cent.

( Source :



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