RBI opens listed Indian equity portfolio investment to all non-resident individuals, not just NRIs and OCIs
AD Category-I banks must facilitate, report and monitor Schedule III listed-equity investment now open to all non-resident individuals, applying the same controls as for NRIs and OCIs
Change
On 15 June 2026 the Reserve Bank of India opened Schedule III portfolio investment in listed Indian equity — previously limited to NRIs and OCIs — to all individuals resident outside India with enhanced limits, requiring AD Category-I banks to facilitate repatriable INR accounts and to report and monitor the investments as they do for NRI/OCI flows, with immediate effect.
Why it matters
RBI A.P. (DIR Series) Circular No. 14 operationalises the Third Amendment to the Non-debt Instruments Rules, opening Schedule III listed-equity portfolio investment to all non-resident individuals (not only NRIs and OCIs) with enhanced investment limits. AD Category-I banks may open repatriable INR accounts for these investors and must report and monitor the prescribed limits in the same manner as for NRI/OCI investments, apply the existing FPI-to-FDI reclassification framework on any limit breach, and ensure compliance with the Rules, the Mode of Payment and Reporting Regulations and applicable SEBI regulations through appropriate systems, procedures and investor documentation. The directions take effect immediately.
Implications
- — AD Category-I banks must extend their Schedule III facilitation, account-opening, reporting and limit-monitoring processes to all non-resident individuals — not only NRIs and OCIs — opening repatriable INR accounts under the Deposit Regulations and applying the same reporting and limit-monitoring already used for NRI/OCI investments.
- — AD Category-I banks must put in place appropriate systems and procedures and obtain the documents and disclosures required from the broadened pool of non-resident individual investors to ensure compliance with the Rules, the Mode of Payment and Reporting Regulations and applicable SEBI regulations — a wider investor base now falls within the bank's KYC, reporting and monitoring obligations.
- — AD Category-I banks must apply the existing FPI-to-FDI reclassification framework (A.P. (DIR Series) Circular No. 19 of 11 November 2024) where a non-resident individual's Schedule III investment breaches the prescribed limits or otherwise requires reclassification.
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