Non Resident Indians and Persons of Indian Origin residing abroad (NRIs) / Foreign Institutional Investors (FIIs) have been granted a general permission by Reserve Bank of India Schedule 5 of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000 for investing in / redeeming units of the mutual funds subject to conditions set out in the aforesaid regulations
Procedure for making Investment in Mutual Funds
Buying in Mutual Funds
Repatriation basis:Payments by NRIs/FIIs may be made by way of Indian rupee drafts purchased abroad or out of funds held in NRE/FCNR account or by way of cheques drawn on non-resident external accounts payable at par and payable at the cities where the Investor Service Centres are located.
In case of Indian rupee drafts purchased and subscriptions through NRIs/FCNR account, an account debit certificate from the bank issuing the draft confirming the debit should also be enclosed.
Non Repatriation basis:NRIs investing on a non repatriable basis may do so by issuing cheques/demand drafts drawn on Non-Resident Ordinary (NRO) account payable at the cities where the Investor Service Centres are located.
Selling/Redemption of Mutual FundsPayment to NRI/FII Unit holders will be subject to the relevant laws / guidelines of the RBI as are applicable from time to time (subject to deduction of tax at source as applicable).
In the case of NRIs :
1. Credited only to NRSR account of the NRI investor where the payment for purchase of Units redeemed was made out of funds held in NRSR account or
2. Credited, at the NRI investor’s option, to his / her NRO or NRSR account, where the payment for the purchase of the Units redeemed was made out of funds held in NRO account or
3. Remitted abroad or at the NRI investor’s option, credited to his / its NRE / FCNR / NRO / NRSR account, where the Units were purchased on repatriation basis and the payment for the purchase of Units redeemed was made by inward remittance through normal banking channels or out of funds held in NRE / FCNR account.