With the arrival of technology and easiness of data management complex businesses have become more convenient and controlled. This rebellion saw the development in a number of small investors. To opening an account in a bank, one can open an account with the Depository Service providers. These accounts are called Demat accounts. By the rules of FEMA, Non-Resident Indians have an opportunity to invest in Indian share markets. Demat accounts play a most important role to NRI clients while investing in the Indian stock market. With the help of the Demat account, NRI’s (Non-Residential Indians) investments in shares are held electronically. Customers can change the shares/stocks if any held in physical form into electronic form and credit the same to Demat account.
Features of NRI Demat Account –
Non-Resident Indians can easily hold a Demat account with Indian banks and there are a small number of features of such Demat accounts when NRIs will come across while opening a Demat account.
1.Types of account: There are two types of accounts based on the nature of investments made on the shares.
a.Repatriated Demat Account
b.Non-Repatriated Demat Account
If the shares buy through investment amounts that can be repatriated, they are to be held in a particular Demat account. Correspondingly, shares purchased from non-repatriable funds are to be held in separate Demat accounts.
2.Investment through Demat: Non-Resident Indians are allowed to make their investments through Demat accounts in Portfolio Investment schemes in India. These schemes permit NRIs to buy securities and shares/stocks from stock market and units of mutual funds and every record associated with these purchases can be held in dematerialized arrangement through the account.
3.BOID (Beneficiary owner identification number): Beneficiary owner identification number is offered to account holders along with a password. Each and every one transaction of shares between account holders and brokers/DPs can be complete through the internet. The contract note plays a major role in such transactions and it is vital for an account holder to be attentive of transaction method in Demat account.
4.Joint holding & supplementary facilities: An NRI Demat account can have joint holders; joint holders should be people of India irrespective of the resident status. Nomination facility is also accessible to NRI (Non-Residential Indians) Demat accounts.
Benefits of Demat Account
Procedure and Documents required opening a Demat account for NRI –
The application form to open a Demat account can be downloaded and filled completely. The following set of documents is to be checked by Indian embassy before they are produced to the financial institute.
Apart from these, you can offer any combination of the following documents as proof of identity, address, sign and bank proof as well.
Joint holders would need a set of all documents mentioned above. The signature of the nominees is required by the bank if there are any nominees to the account. The set of documents mentioned above are in general and there may be little more documents required for depending on the bank.
NRI Demat providing banks in India –