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, it is required to select type of 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 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 with Resident status.The Non-resident Demat account can be closed after transferring the securities from the Non-resident 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.