What is an NRO Non-PIS account and how is it different from an NRE account?
An NRO Non-PIS account is a type of bank account that enables NRIs to invest in Indian stock markets and mutual funds using income earned within India, such as rent, dividends, or pension income. It does not fall under the RBI’s Portfolio Investment Scheme (PIS) and is non-repatriable beyond regulatory limits.
Features of an NRO Non-PIS account
- No PIS letter is required
- Not subject to daily RBI trade reporting
- Can be linked with any Indian bank account
- Supports mutual fund and equity investments
- F&O trading is allowed with a Custodial Participant (CP) code
- Intraday and BTST trades are not permitted
Types of bank accounts available to NRIs
NRIs are not permitted to maintain resident savings accounts in India under FEMA. Instead, they can choose from two designated NRI account types:
- NRO (Non-Resident Ordinary) – for managing income earned in India
- NRE (Non-Resident External) – for holding and investing foreign income in INR
These accounts differ in repatriation, taxation, and investment eligibility.
Key differences between NRO and NRE accounts
| Feature | NRO Account | NRE Account |
|---|
| Purpose | Manage income earned in India (rent, dividends, pension) | Hold and invest foreign income in INR |
| Source of deposits | Indian earnings, inward remittances, NRO transfers | Inward remittances, transfers from other NRE accounts |
| Repatriation | Restricted to USD 1 million/year (with documentation) | Fully repatriable (principal + interest) |
| Taxation | Interest is taxable in India | Interest is tax-free in India |
| F&O trading | Allowed with the Custodial Participant (CP) code | Not allowed |
| Mutual fund investments | Allowed (except U.S./Canada tax residents) | Allowed (same restrictions) |
| PIS letter requirement | Not required | Mandatory for equity trading under the PIS route |
| RBI reporting | No daily reporting needed | Mandatory through a designated bank |
| Bank linking with FYERS | Any Indian bank is allowed | Limited to RBI-approved PIS banks |
| Joint holding | Allowed with NRI or resident relative | Only with another NRI |
Repatriation refers to the ability to transfer funds from your Indian bank account to your country of residence.
What If...
| Scenario | What you should know |
|---|
| You want to trade in F&O | Use an NRO Non-PIS account and obtain a CP code via Orbis |
| You want to map your existing Indian bank | Permitted under NRO Non-PIS |
| You prefer tax-free interest and full repatriation | Use an NRE account (but F&O not allowed) |
| You still operate a resident savings account | Must be converted to NRO/NRE before investing as an NRI |
| You want to trade intraday or BTST | Not allowed under NRO Non-PIS due to settlement restrictions |
Last updated: 07 Aug 2025
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