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What is the Portfolio Investment Scheme (PIS)?
The Portfolio Investment Scheme (PIS) is a scheme of the Reserve Bank of India (RBI) that allows Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs) to invest in the Indian stock markets. Under this scheme, NRIs and PIOs can purchase and sell shares and convertible debentures of Indian companies on a recognized stock exchange.
Account Requirements: NRIs need to open a designated NRE (Non-Resident External) or NRO (Non-Resident Ordinary) account with an authorized bank in India to facilitate transactions under the PIS.
- NRIs can buy and sell shares and convertible debentures on a repatriation or non-repatriation basis.
- The transactions must be routed through a designated branch of a bank authorized by the RBI.
- Investments made through the NRE account are repatriable, meaning the principal amount and the gains can be transferred back to the NRI’s country of residence.
- Investments made through the NRO account are not fully repatriable. Only current income like rent, dividends, etc., can be repatriated, subject to certain limits and conditions.
The PIS facilitates NRIs’ participation in the Indian stock markets while ensuring that their investments are tracked and regulated according to Indian laws.