What Is a Non-Repatriable Demat Account? Meaning & Features

For Non-Resident Indians (NRIs) looking to invest in Indian securities, there are specific regulatory pathways that govern how funds can be invested and repatriated. One such route is through a Non-Repatriable Demat Account, which allows NRIs to invest in the Indian stock market using funds that cannot be transferred back abroad. Understanding how these accounts work is essential for informed investing under the guidelines set by RBI and SEBI.

A Non-Repatriable Demat Account is a dematerialised account linked to a Non-Resident Ordinary (NRO) bank account, through which NRIs can invest in Indian stocks and other securities without the option of sending funds back to their country of residence.

It enables NRIs to invest their Indian income (e.g., rent, dividends, pension) in the stock market.

To open a Non-Repatriable Demat Account, the following criteria must be met:

• You must be an NRI or a Person of Indian Origin (PIO)
  

• Must hold an NRO bank account with an Indian bank
  

• KYC compliance is mandatory (PAN, passport, visa, overseas address proof)
  

• The account should be opened with a depository participant (DP) registered with NSDL or CDSL

Key details to understand about Non-Repatriable Demat Accounts include:

Investment in agricultural land or plantation property is not permitted under this account.

Non-repatriable accounts are typically used when the NRI does not intend to take funds out of India. Consider the following differences:

Follow these steps to open a Non-Repatriable Demat Account:

Step-by-Step Process:

1. Open an NRO Bank Account
   

   • Visit any authorised Indian bank (HDFC, ICICI, SBI, etc.)
     

   • Submit required documents including passport, PAN, visa, and proof of overseas address
     

2. Select a Depository Participant (DP)
   

   • Choose a registered DP such as Zerodha, Groww, Angel One, etc.
     

   • Submit KYC and account opening forms
     

3. Link to NRO Account
   

   • The demat account must be connected to your NRO account
     

   • Link trading account (if any) for investment execution
     

4. Get PIS Approval (if required)
   

   • For secondary market transactions in equities, RBI’s PIS approval may be required via your bank
     

5. Start Investing
   

   • You can invest in Indian listed shares, mutual funds, bonds, and more
     

Certain restrictions may apply based on SEBI and RBI rules, especially for F&O trades.

Consider these advantages and limitations of a Non-Repatriable Demat Account:

Pros

• Enables investment of income earned in India
  

• Easier to manage finances locally
  

• Ideal for long-term India-based investment goals
  

Cons

• No free repatriation of funds
  

• Taxation and TDS applicable at source
  

• Limited investment flexibility compared to repatriable accounts
  

Typical scenarios where Non-Repatriable Demat Accounts are preferred include:

• Investing surplus rental income from Indian property
  

• Parking proceeds from pensions or fixed deposits in India
  

• Investing in mutual funds and stocks for long-term capital appreciation
  

• Participating in IPOs using NRO-linked funds
  

A Non-Repatriable Demat Account serves as a suitable channel for NRIs who wish to invest their India-based income in domestic financial instruments. While it comes with repatriation restrictions, it offers access to a wide range of investments. For NRIs with long-term goals in India or those not intending to transfer funds abroad, this account type is both practical and tax-compliant.

This content is for informational purposes only and the same should not be construed as investment advice. Bajaj Finserv Direct Limited shall not be liable or responsible for any investment decision that you may take based on this content.