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Portfolio Investment Scheme |
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What is the Portfolio Investment Scheme?
Under this scheme, NRIs/OCBs are permitted to acquire shares/debentures of Indian companies or units of domestic Mutual Funds through the stock exchange/s in India.
What is the procedure for making applications?
The application is to be submitted to Reserve Bank through a designated branch of a bank in India in one of the prescribed forms, i.e. NRC/NRI/RPC/RPI. Reserve Bank issues general permission for a period of 5 years which can be renewed further by authorised dealer concerned for a period of 5 years at a time.
What is a designated branch?
Reserve Bank has authorised a few branches of each bank to conduct the business under Portfolio Investment Scheme on behalf of NRIs/OCBs. These branches are the main branches of major commercial banks located close to the stock exchange/s. NRIs/OCBs will have to route their applications through any of the designated bank branches who have authorisation from Reserve Bank.
Whether NRI/OCB can apply through more than one designated branch?
No. Each NRI/OCB has to select one branch for this purpose for investment on repatriation/non-repatriation basis.
Is it necessary to maintain a bank account with the designated branch through whom the application is made?
It is advisable to maintain a bank account with the designated branch for administrative convenience.
Is there any ceiling on the investment under the Portfolio Investment Scheme?
There is an overall ceiling of 10% of paid-up equity share capital of the company/paid-up value of each series of convertible debentures for purchase by NRIs/OCBs. The overall ceiling can be raised to 30% if the company concerned passes a special resolution to that effect in its general body meeting and a Board resolution. Individually, NRIs/OCBs can make investment upto 5% of the paid-up equity share capital/each series of convertible debentures. However, there is no ceiling for investment in domestic Mutual Funds.
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