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The following write up contains information related to demat account for Non Resident Indians in India. Features, benefits and application procedure for NRI demat account are briefed in the write up.

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Demat Account for NRIs in India

Demat Account:-
With the advent of technology and ease of data management complex businesses have become more manageable and structured. Not only has dematerialization paved the way for electronic holding of shares, it has also made the denomination of such holding as little as 1 share. This revolution saw the growth in the number of small investors and the demand rose leading to the mushrooming of Depository Service Providers. Akin 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 major role to NRI customers while investing in Indian share market.
 
Features of NRI Demat Account:-
Non Resident Indians can hold a demat account with Indian banks and there are few aspects of such demat accounts the NRIs will come across while opening a demat account.
 
Types of account: There are two types of accounts based on the nature of investments made on share. If the shares purchased are through investment amounts that can be repatriated, they are to be held in a particular demat account. Similarly shares purchased from non repatriable funds are to be held in separate demat accounts.
 
Investment through demat: Non Resident Indians are permitted to make their investments through demat accounts in Portfolio Investment schemes in India. These schemes allow NRIs to purchase securities and shares from stock market and units of mutual funds and all records related to these purchases can be held in dematerialized format through the account.
 
BOID: Beneficiary owner identification number is provided to account holders along with a password. All transactions of shares between account holders and brokers/DPs can be made through internet. The contract note plays a major role in such transactions and it is important for an account holder to be aware of transaction procedure in demat account.
 
Joint holding and other facilities: An NRI demat account can have joint holders; joint holders should be citizens of India irrespective of the resident status. Nomination facility is also available to NRI demat accounts
 
Benefits of Demat Account:-
  • The entire process opens up a world of opportunities for Non Resident Indians to make investments in Indian share in an effective manner.
  • The whole process reduces the physical documentation process that exists in share purchase/selling and holding shares.
  • The transaction of shares is comparatively quicker and the mode is easier.
  • Forgery, loss of physical documents, late delivery and various other problems are minimized in this process.
  • The concept and therefore the related hassles of odd lots has been effectively eliminated as in the demat form the market lot for any securities is of one share only. 
Procedure and Documents Required to open 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.
  • Passport or driving license or telephone/electricity bill etc serves as proof of address
  • PAN card is mandatory for an NRI to hold demat account
  • Passport size photograph 
Joint holders would require 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 few more documents demanded for depending on the bank.
 
NRI Demat providing banks in India:-
  • HDFC
  • HSBC
  • Citi bank
  • ICICI
  • Bank of Baroda