How are NRI investment positions in Indian companies monitored?
To ensure compliance with sectoral investment limits, the Reserve Bank of India (RBI) actively monitors the investment positions of NRIs and Foreign Institutional Investors (FIIs) in listed Indian companies. This oversight safeguards against breaches of permissible foreign ownership levels under the Portfolio Investment Scheme (PIS).
RBI monitoring process
- Daily reporting:
RBI monitors NRI and FII investments through daily reports submitted by designated bank branches handling these transactions. Caution list mechanism:
When the combined NRI/FII holdings in a company approach within 2% of the permitted limit, RBI issues a caution list to banks.
- Further NRI/FII purchases in that company require RBI’s prior approval.
Ban list enforcement:
Once the prescribed foreign ownership cap is fully utilised, RBI categorises the company under a ban list.
- NRIs and FIIs are prohibited from making further purchases in that company through PIS routes.
What if...
| Scenario | What you should know |
|---|
| You buy shares of a company on the Ban List | The transaction will be reversed or rejected by the broker or exchange |
| You already hold shares in a banned company | You can continue holding or selling, but not purchase additional shares under PIS |
| You want to track eligible companies | Refer to the RBI’s updated caution and ban lists before placing trades as an NRI investor |
Always verify the current RBI list of restricted companies before investing. FYERS platforms reflect these restrictions at the time of order placement, helping NRI clients stay compliant.
For the current list of companies under RBI's caution or ban, please click here.
Last updated: 24 Jun 2025
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