Finance > Investments > Govt Securities
Investment in Government Securities, National Plan Savings Certificates and Units of UTI
NRIs are permitted to invest freely in securities (other than bearer securities) of the Central or any State Government and National Plan/Savings Certificates by making remittances from abroad or out of funds held in their NRE/FCNR accounts, provided the purchase/subscription is arranged through the authorized dealer maintaining the account. Authorized dealers may also make such investments on behalf of NRIs out of funds held in their NRO accounts subject to the condition that the funds invested and any income earned thereon will not be eligible for repatriation out of India at any time in future. Likewise, OCBs can also invest in Government securities and National Plan/Savings Certificates if permitted under the terms and conditions applicable to the sale/issue of such securities and the purchase/subscription is arranged through an authorized dealer.
NRIs/OCBs are permitted to invest in units of UTI subject to the terms and conditions applicable for the issue/sale thereof, against remittances from abroad or out of funds held in their NRE/FCNR account, through the authorized dealer maintaining the account. Funds held in their NRO accounts may also be utilized for the purpose subject to the condition that the funds invested and any income earned on such investment will not be eligible for repatriation out of India at any time in future. UTI has also been granted general permission by Reserve Bank for issue of units to NRIs/OCBs, provided the funds towards the purchase price are remitted by the investors from abroad in an approved manner or the price is paid out of the investors' NRE/FCNR accounts maintained with authorized dealers in India. Where funds held in NRO accounts are utilized for purchase of units, UTI will issue units to NRIs/OCBs on the condition that the funds invested and income earned thereon will not qualify for repatriation out of India at any time in future. Units can thus be bought by NRIs/OCBs directly from UTI also.
Sale/Transfer of Government Securities/Units
NRIs/OCBs may freely sell/transfer Government securities through a Stock Exchange in India, provided the sale/transfer of such securities is arranged through an authorized dealer. Similarly NRIs/OCBs holding units of UTI may freely tender them for repurchase by the Trust. Repatriation of Interest/Dividend/Maturity Proceeds of Government Securities/National Plan and Savings Certificates/Units
Interest and maturity proceeds of Government securities including National Plan/Savings Certificate, sale proceeds of Government securities sold on Stock Exchanges as well as dividend on Units of UTI and repurchase proceeds thereof may be credited by authorized dealers to the NRO accounts of non-resident investors without reference to Reserve Bank. As far as credits of such funds to NRE/FCNR accounts are concerned, powers of authorized dealers are restricted to cases where the original investment was made by remittances from abroad or by debit to the NRE/FCNR accounts maintained by non-resident investors. In the case of Units purchased directly from UTI, authorized dealers may credit the dividends/repurchase proceeds to the investor's NRE/FCNR account or make remittance to the investor abroad only if the payment is received from UTI with a confirmation that the investment in those units was made out of funds received from abroad in an approved manner or by debit to NRE/FCNR account of the unit holder. In all other cases, dividend/repurchase proceeds should be credited to NRO accounts.