NEW DELHI — The Reserve Bank of India on Thursday announced revised guidelines that simplify portfolio‑management services (PMS) for non‑resident Indians (NRIs), allowing them to invest in Indian equities with fewer procedural hurdles.
Key changes to NRI PMS accounts
The RBI circular, reported by the New Indian Express on 27 September 2026, removes the requirement for NRIs to maintain a separate on‑shore bank account before opening a PMS mandate. Instead, investors can link their overseas bank details directly to the PMS provider, provided they complete the standard Know‑Your‑Customer (KYC) process using Aadhaar verification.
Under the new framework, Aadhaar numbers of NRIs and overseas citizens of India (OCIs) will be accepted for identity verification, a move that aligns with the Indian Eagle’s recent report on the global rollout of Aadhaar for 36 million Indians abroad. The RBI said the change is intended to reduce documentation time and lower entry barriers for the diaspora, which collectively holds an estimated ₹12 trillion in overseas assets.
Impact on investment limits and product offerings
NRIs can now allocate up to ₹2 crore per PMS mandate without seeking prior approval from the RBI, a threshold that matches the limit for resident investors. The revised rules also permit the inclusion of alternative‑investment products such as private equity and real‑estate funds within a single PMS portfolio, subject to the provider’s risk‑management policies.
Portfolio managers must disclose the fee structure in a standardized format, and the RBI will monitor compliance through quarterly reports submitted to the central bank’s Financial Stability Unit. The guidelines stipulate that any breach of the fee‑disclosure requirement will attract a penalty of up to 2 % of the assets under management, as per the RBI’s enforcement provisions.
Procedural steps for NRIs
To open a PMS account, an NRI must submit a digitally signed application, a copy of a valid passport, and an Aadhaar‑linked overseas address proof. The RBI circular allows the use of electronic signatures issued by recognized foreign notaries, eliminating the need for physical document courier services.
Once the application is approved, the PMS provider will create a dedicated investment mandate that can be accessed through a secure online portal. The portal will display real‑time portfolio performance, transaction history, and compliance alerts, enabling investors to monitor their holdings without visiting India.
Industry response
Major brokerage houses and wealth‑management firms have welcomed the move, noting that the streamlined process is likely to attract a fresh wave of capital from the Indian diaspora. A senior executive at a leading PMS provider, who chose to remain unnamed, said the new rules “remove a long‑standing bottleneck and make it easier for NRIs to participate in high‑growth sectors such as technology and renewable energy.”
Consumer‑finance analysts point out that the RBI’s decision coincides with a broader push to integrate NRIs into the domestic financial system, complementing recent initiatives that expanded the use of Aadhaar for overseas users and introduced NRI‑focused credit‑card products, as highlighted in an Economic Times feature on NRI banking services.
Regulatory safeguards
The RBI emphasized that the relaxed KYC norms will not compromise anti‑money‑laundering (AML) standards. All PMS transactions will continue to be screened under the Prevention of Money‑Laundering Act, and providers must retain transaction records for a minimum of five years.
Furthermore, the central bank will conduct periodic audits of PMS firms to ensure adherence to risk‑management protocols, especially for cross‑border fund flows that exceed ₹5 crore in a single financial year.
Looking ahead
Analysts expect that the new guidelines could increase NRI participation in Indian capital markets by 15 % to 20 % over the next two years, injecting fresh liquidity into equity and debt segments. The RBI has indicated that it will review the impact of the reforms in its annual financial stability report, scheduled for release in March 2027.
