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What is the Difference Between NRI Demat Account and Resident Demat Account

27 Mar 2023

In India, both resident Indians and non-resident Indians can trade securities in the secondary markets. However, non-resident Indians must have an NRI Demat account as per the Foreign Exchange Management Act (FEMA). The FEMA rules and regulations cover all foreign currency transactions in India. Indians living and earning in foreign currency abroad must comply with all FEMA regulations when investing in India.


  • Demat account for NRI

A online Demat account for NRI can be opened with CSDL of NSDL via any of the depository participants such as banks and trading houses. Similar to resident Indians, non-residents also need a bank account number, an NRI trading account, and an NRI Demat account to be able to trade in shares and other securities in India. These accounts can be opened under RBI’s Portfolio Investment Scheme (PINS) or through the ordinary route (non-PINS). There are further classifications under these accounts. The repatriation of capital and profits back to the country of origin depends on the type of account a non-resident Indian has.

The Portfolio Investment Scheme allows NRIs to buy and sell Indian equities through the Indian stock exchanges. A non-PINS account can be used to make investments in initial public offerings, or investments made in mutual funds as residents.

  • Opening an NRI Trading Account & Demat account

The process to open trading and demat account is mostly similar to the process for an ordinary Indian. A non-resident needs to approach a depository participant to open these accounts. A depository participant works with the CSDL or NSDL to facilitate buying and selling of securities. Depository participants are registered with the Securities and Exchange Board of India.

Non-resident Indians have additional documents required to open an NRI trading account and NRI Demat account; apart from PAN, photographs, proof of address, etc. they are required to submit a copy of their passport and employment visa or work permit (as applicable). Apart from these, non-resident Indians require an NRE or NRO bank account.

Repatriation of funds is not allowed with NRO bank accounts, while it is allowed for NRE account holders. NRE or NRO accounts can be opened with any bank. However, if you want to open an account under the PINS scheme, only designated branches and dealers can open your account. The transfer of shares in an NRI Demat account can only take place via sale or purchase in the Indian markets; RBI guidelines do not allow private sale or gifts from an NRI Demat account.


The Indian equity markets have the home-field advantage for most non-resident Indians. They understand the markets, know the companies, their business practices, etc. While it is slightly complicated to open a Demat account for NRI and NRI trading account, the process should not deter you from opening them and investing in the Indian markets. Most depository participants have experts available to help their customers comply with all FEMA and RBI regulations. Various options available to non-residents also allow them the flexibility to decide what kind of accounts would suit their investment needs.

Related Articles: How to Open a Demat Account Without a Broker | Factors to Keep in Mind While Opening a Demat account | Factors to Consider When Opening a Demat Account | 10 Points to Remember When Operating your Demat Account | Types Of Demat Account & Trading Account

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