How will an NRI invest in Indian MFs?

To invest in Indian Mutual Funds, the NRI has to open any one of the following three kinds of accounts through the banks who provide such facility. They are:

  • Non-Resident (External) Rupee (NRE) accounts are Rupee accounts from which funds are freely repatriable. They can be opened with either funds remitted from abroad or local funds transferred from NRE/FCNR accounts, which can be remitted abroad.
  • Non-resident Ordinary Rupee (NRO) accounts are Rupee accounts and can be opened with funds either remitted from abroad or generated in India. The amount in such accounts is non-repatriable. However, funds in NRO accounts can be remitted abroad subject to/as per various directives in force at the time of repatriation. More details can be found on the Reserve Bank of India (RBI) website
  • Foreign Currency Non-Resident (FCNR) accounts are similar to the NRE account except that the funds are held in permitted foreign currency like USD, GBP, JPY, EUR, CAD and AUD and that it can be opened only in the form of term deposits with a maturity of up to five years.