What is the difference between NRI, NRE & NRO accounts. In which segments we can trade with these accounts. What is the procedure to open trading account with these accounts?

General
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NRE Account is a Non Resident External Account where both the principal and interest amount is freely repatriable. NRO Account is a Non Resident Ordinary Account. In this account the principal and interest and upto USD 1 million per financial year is repatriable. You can open either of the bank accounts. Repatriable basically means the ability of an asset to be moved from a foreign country to the investor’s home country.

After the NRE/NRO account is opened, you need to get the approval from the RBI to invest in the Indian secondary market. You can get this approval through your bank. Once you get the necessary approval through your bank you will be given a PIS (Portfolio Investment Scheme) permission letter.

The PIS account allows you to invest in the secondary market through a registered stock broker who is a member on a registered stock exchange. Once you receive the PIS permission letter, you can open a trading/demat account

Let me quickly sum up & list the steps for you:

  • Open a bank account in a branch of a designated bank by RBI.

  • Apply for a general approval for investment in Indian Stock Market through the bank branch.

  • Open a trading account with any registered Stock broker for carrying out transactions on Stock Exchanges.

  • Open a Demat A/C with any depository participant.

  • NRE PIS account can be used only for trading in Equity segment.

  • NRO PIS account can be used only for trading in Equity segment.

Be sure to specify to your broker which account you want to map (NRE PIS/ NRO PIS) because NRE PIS & NRO PIS can’t be mapped to the same trading account. If you want to map both NRE PIS & NRO PIS you have to obtain 2 trading codes from your broker.

2 Likes
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@Venu Madhav Thanks, got to know lot of things :slight_smile:

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Thanks VM…

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Mr. Venu, FnO cannot be traded through these accounts ? Do we need to open some other account ? Thanks

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Is this a typing mistake where you said NRE and NRO pis can be used only for trading in equity …I think you meant NRO PIS account can only be used for trading in FNO ? or for FNO you require NRO - non pis? @AkshayAtur @

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No. This is correct. You can trade in equities through both NRE & NRO.

A PIS account isn’t required to trade in F&O. You’ll only map the NRO-SB account (Non-PIS).

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Can you please tell me if NRI can trade in MCX?

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No, NRI’s cannot trade in MCX.

1 Like
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Wow…I had wrong info …
So NRE or NRO PIS can be used for trading in equity — can both be used for intraday trading (I believe they both can be used for delivery correct me if I am wrong)

Also, for FNO trading - you can use only one type of ac which is NRO - non pis …you can not use NRE pis or non pis …neither you can use NRO PIS correct?

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NRIs have to take delivery of shares purchased and give delivery of shares sold; They cannot trade intraday or BTST. Irrespective of the type of account (NRE/NRO) you cannot trade intraday in cash segment (equities).

There isn’t a requirement of a PIS to trade in F&O. You’ll transfer funds to the clearing member (one who’s issued the CP code) and not the trading member (broker) from the norma NRO-SB (non-PIS) account only.