Download RBI Circular No.29/2013-14/192 Dated August 20, 2013 for Investments by Non-resident Indians (NRIs) under Portfolio Investment Scheme (PIS) Liberalisation of Policy

Download RBI Circular No.29/2013-14/192 Dated August 20, 2013 for Investments by Non-resident Indians (NRIs) under Portfolio Investment Scheme (PIS) Liberalisation of Policy

RESERVE BANK OF INDIA Foreign Exchange Department
Central Office

Mumbai – 400 001


A. P. (DIR Series) Circular No.29                                                               August 20, 2013


All Category-I Authorised Dealer Banks Madam / Sir,

Investments by Non-resident Indians (NRIs) under Portfolio Investment Scheme (PIS) Liberalisation of Policy

Attention of Authorised Dealers Category-I (AD Category – I) banks is invited to Schedule 3 of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 notified vide Notification No. FEMA 20/2000-RB dated May 3, 2000 (hereinafter referred to as Notification No. FEMA 20), as amended from time to time in terms of which, NRIs can invest under PIS   on  repatriation   and/or   non-repatriation  basis   in  shares   and  convertible debentures of listed Indian companies on a recognized stock exchange in India through   a   registered   stock   broker.   Further,   NRIs   may   purchase   and   sell shares/convertible debentures under the PIS through a branch designated by an Authorised Dealer for the purpose and duly approved by the Reserve Bank of India.

2.         As a measure of further liberalisation, it has been decided toi)   allot Unique Code number only to Link office of the AD Category – I bank; and

ii)  dispense with the allotment of Unique Code number to each branch       designated by  that AD Category – I bank administering the Scheme. Accordingly, henceforth in accordance with the policy approved by the Board, AD Category – I bank shall be free to permit its branches to  administer  the  Portfolio  Investment  Scheme  for  NRIs  subject  to  the following:

a)   the  AD Category  – I bank  while  granting  permission to NRI   for

investment under PIS shall allow them to operate the scheme  as per the terms and conditions are as Annex-A;

b)   the designated link office  shall continue to report on a daily basis PIStransactions undertaken on behalf of NRIs for their entire bank to the Reserve Bank under the Online Report Filing System (ORFS) in form LEC     (NRI)          as   per   present   practice   in   vogue   web   site (;


c)   the AD Category – I bank shall provide to the Reserve Bank the complete  contact   details   of  such  link   office  in   advance  before commencing operations;

d)   the AD Category – I bank shall sensitise the branches administering the Scheme  to ensure that NRIs are not allowed to invest in any Indian company which is engaged or proposes to engage in the business of chit fund, Nidhi company, agricultural or plantation activities, real estate business (does not include development of townships, construction of residential /  commercial  premises,  roads  or  bridges,  educational institutions, recreational facilities, city and regional level infrastructure, townships),  construction  of  farm  houses,  manufacturing  of  cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes and trading in Transferable Development Rights (TDRs) and in sectors/ activities as specified in terms of Notification No. FEMA.1/2000-RBdated May 3, 2000, as amended from time to time; and

e) ensure compliance with instructions  issued through A.D.(M.A. Series)       Circulars, EC.CO.FID circulars annexed as Annex-B and the regulatory requirements under FEMA, 1999. It  may  be  noted  that OverseasCorporate Bodies( OCBs) have been derecognized as an eligible ‘class of investor’ under various routes/scheme available  under the extant Foreign Exchange Management  Regulations in terms of the Foreign Exchange   Management [withdrawal   of   General   Permission   toOverseas Corporate Bodies( OCBs)] Regulations, 2003 notified vide Notification No. FEMA.101/2003-RB dated October 3, 2003.

3.           AD Category – I banks may bring the contents of the circular to the notic e of their customers/constituents concerned.

4.           Reserve  Bank  has  since  amended  the  Regulations  and  notified  vide Notification No. FEMA.261/2013-RB dated February 27, 2013 vide G.S.R. 515(E) dated July 30, 2013.

5.           The directions contained in this circular have been issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and re without prejudice to permissions / approvals, if any, required under any other law.

Yours faithfully,

(Rudra Narayan Kar)

Chief General Manager-in-Charge

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