New RBI rules for NRIs and OCIs: Key changes in investments, NPS and money transfers
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RBI eases investment rules for NRIs and OCIs
The Reserve Bank of India (RBI) has amended foreign exchange regulations governing investments by Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs) and other persons residing outside India.
The new rules came into effect on June 13, 2026, under the Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) (Amendment) Regulations, 2026.
The new rules came into effect on June 13, 2026, under the Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) (Amendment) Regulations, 2026.
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New payment rules for investments by NRIs and OCIs
Under the amended regulations, investments by individuals residing outside India can be funded through:
● Inward remittances from abroad through banking channels, or
● Funds held in repatriable deposit accounts maintained under the Foreign Exchange Management (Deposit) Regulations, 2016.
The RBI has also allowed NRIs and OCIs to maintain a designated repatriable rupee account, which can be used exclusively for investments permitted under the relevant FEMA schedule.
● Inward remittances from abroad through banking channels, or
● Funds held in repatriable deposit accounts maintained under the Foreign Exchange Management (Deposit) Regulations, 2016.
The RBI has also allowed NRIs and OCIs to maintain a designated repatriable rupee account, which can be used exclusively for investments permitted under the relevant FEMA schedule.
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New payment rules for NPS investments
NRIs and OCIs can now subscribe to the National Pension System (NPS) using:
● Inward remittances from abroad,
● Funds held in a repatriable foreign currency account,
● A repatriable rupee account, or
● A Non-Resident Ordinary (NRO) account.
● Inward remittances from abroad,
● Funds held in a repatriable foreign currency account,
● A repatriable rupee account, or
● A Non-Resident Ordinary (NRO) account.
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What happens to sale proceeds of investments?
For equity instruments:
● Sale proceeds, after deduction of taxes, can be remitted outside India, or
● Credited to the designated repatriable rupee account of an NRI or OCI.
For mutual fund units and NPS investments:
● Sale proceeds (net of taxes) can be remitted abroad, or
● Credited to any account chosen by the NRI or OCI investor.
● Sale proceeds, after deduction of taxes, can be remitted outside India, or
● Credited to the designated repatriable rupee account of an NRI or OCI.
For mutual fund units and NPS investments:
● Sale proceeds (net of taxes) can be remitted abroad, or
● Credited to any account chosen by the NRI or OCI investor.
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Rules for shares of Indian companies listed on international exchanges
The RBI has also clarified the payment and remittance mechanism for equity shares of Indian companies listed on international exchanges. As for the mode of payment, the subscription amount for such shares must either:
● Be remitted to a bank account in India, or
● Be deposited into the foreign currency account of the Indian company.
The sale proceeds, after payment of applicable taxes, may either:
● Be remitted outside India, or
● Be credited to the bank account maintained by the permissible holder
● Be remitted to a bank account in India, or
● Be deposited into the foreign currency account of the Indian company.
The sale proceeds, after payment of applicable taxes, may either:
● Be remitted outside India, or
● Be credited to the bank account maintained by the permissible holder
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RBI revises reporting requirements
The RBI has also amended reporting rules under Regulation 4. Banks authorised by the RBI must report to the RBI using Form LEC (Individual Foreign Investor - IFI). Any purchase or transfer of shares/equity instruments on Indian stock exchanges by individual investors living outside India, including NRIs and OCIs.