Account allows NRIs to hold Indian securities using locally earned income, subject to FEMA, RBI and SEBI rules
- Non-Resident Indians (NRIs) with income or financial interests in India can use an NRO Demat account to hold eligible Indian securities electronically
- The account is designed mainly for investments funded through income earned in India, such as rent, dividends, pensions and interest
An NRO Demat account is linked to an NRO bank account and an NRI trading account. Securities purchased through the arrangement are held electronically, while sale proceeds are generally credited back to the linked NRO account. The framework is governed by applicable Foreign Exchange Management Act (FEMA), Reserve Bank of India (RBI) and Securities and Exchange Board of India (SEBI) rules.
NRIs and eligible OCI/PIO cardholders can open such accounts, subject to the requirements of the bank and broker. A PAN, passport, overseas address proof, NRO bank details and prescribed KYC and tax declarations are generally required. Documentation requirements can vary between financial institutions.
The account can be used to hold investments such as listed shares, mutual funds, exchange-traded funds (ETFs), bonds, IPOs, REITs and InvITs, subject to regulatory and product-specific restrictions. Certain investment categories and trading facilities may not be available through the NRO route.
A key distinction is repatriation. NRO funds are generally non-repatriable, although eligible funds can be transferred abroad within applicable limits and after meeting tax and documentation requirements. The current framework provides for repatriation of certain NRO funds up to US$1 million per financial year, subject to conditions. Current income such as rent, pension, interest and dividends is treated separately under the applicable rules.
NRIs changing their residential status also need to ensure that existing resident bank and Demat arrangements are updated in accordance with FEMA requirements
The latest Groww guide, published on September 21, 2026, highlights the NRO Demat route as a way for NRIs to manage Indian investments remotely while keeping locally sourced funds and securities within the applicable regulatory framework.
