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FAQs of Investing in Mutual Fund for NRI
There are answers of some questions that may arise in your mind before investing: Q. How does an NRI invest in Mutual Fund? Q. What address should be mentioned on the application form? Can an NRI mention a local address for all communication? The application form of Mutual Fund has a provision for local address, but the NRI/FII Overseas Address is mandatory. If the local address is also given, in such cases, the Indian address is registered for the purpose of contact and the foreign as an alternative address. The Statement of Account will show the Indian address and the communication will be sent to this address only. However, if the investor wants the foreign address for the purpose of communication, the same can be registered accordingly. Q.Can an NRI investor get the Statement of Account and other announcement by email? One can get the all announcement and information like Statement of Account, Quarterly Newsletter & Annual Report, Communication on change of address, bank etc by email.  One just needs to mention his email id and subscribe for the above at the time of investing byselecting the related columns in the application form/common transaction form.Q.What is the mode of payment for Repatriation and Non-Repatriation Basis? NRIs/ PIOs can invest in units of the schemes on a fully repatriable basis or on a non-repatriable basis where the principal is non-repatriable but the income distributions are repatriable. Repatriable Basis : Payments for the purchase of the units may be made by way of Indian rupee drafts purchased abroad or by way of cheques drawn on the NRE/FCNR account of the investor, payable at the city where the application form is accepted by any of the Reliance MF official points of acceptance of transactions. In case of DDs from FCNR, a Foreign Inward Remittance Certificate (FIRC) from the bankers is necessary, confirming that funds are from FCNR account and are repatriable. Non-Repatriable Basis : Payments for the purchase of the units may be made by way of Indian rupee drafts bought abroad, or by way of cheque/DDs drawn on the NRE/NRO account of the investor, payable at the city where the application form is accepted by any of the RMF official points of acceptance of transactions. FII Investors: FIIs may pay for their subscription amounts by way of Indian rupee drafts purchased abroad or out of the funds held in their Foreign Currency account or Non-Resident Rupee account maintained in a official branch of an authorized dealer. The Rupee drafts/cheque should be made payable at a city where the application is accepted by the MF official points of acceptance of transactions. Q. The cheque or the DD should be payable or drawn on which location? The cheque/DD should be payable or drawn on the location where the application is submitted and received. Q. Will Every MF company accept an NRI application with an overseas bank account detail? No. Overseas bank account details are not accepted since the payment is made in Indian rupees by way of cheque/direct credits. Q. After an application for investment when will the units be allotted to the NRI? A. If an application is accepted at the official place of acceptance before the particular cut-off time on any business day, the allotment of units at the NAV of the business day shall be applicable, with adjustments for any entry load, if any, as per the provisions of the Offer Document of the related scheme. All applications received after the prescribed time will be treated as having been received on the next business day and the units shall be allotted accordingly. In case of liquid schemes, allotment will be based on utilization of funds. Q. How does an NRI investor redeem his/her funds? A. In order to redeem funds the investor has to submit the redemption request in original at the nearest official point of acceptance of transactions or send to us. The redemption request forms must have the investor’s folio number, the amount/name of the schemes/unit he/she would like to redeem and should be duly signed by the unit holders on record or their Power Of Attorney (POA) holders. Redemption requests that lack valid signatures will not be accepted. Q. How will the redemption amount be paid? Redemption amount will be paid by a payable at par cheque and it will be made in favour of the first unit holder and the bank account number shall be mentioned on the cheque as well. Direct credit facility is also provided if the investor holds a bank account with any of the authorised banks. Redemption proceeds and/or income distribution (if any) will be payable in Indian rupees only. The scheme will not be liable for any loss on account of exchange fluctuations, while converting the rupee amount to any other currency. Q. Is the Income/Dividend on mutual fund units repatriable? The entire income/dividend received on investment will qualify for full repatriation provided the member continues to be a Non-Resident Indian in terms of [Schedule 5 of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000]Q. Does any Mutual Fund currently do a transfer to the overseas account? No. Investors need to contact their authorized dealers/banks for the same. Q. Can a Power of Attorney (POA) holder invest on behalf of the NRI investor? Yes. In a mutual fund the POA holder has the authority to invest on behalf of the investor and sign documents for initial and additional purchases as well as request for redeeming units from the account. While applying for purchase of units the POA holder needs to submit the original POA or an attested copy duly notarized. The POA should contain the signature of both the NRI investor and the POA holder. Only then the POA is registered and the POA holder has the right to transact on behalf of the NRI investor. The POA holder’s signature will be verified before and for processing any transaction/request. Attestation of the photocopy of the POA can be done by: The Notary himself or The Branch Manager of the bank where the NRI has his NRE/NRO Bank account. The name and the designation/code of the Bank Manager should be clearly mentioned. The Branch Manager of Reliance Mutual Fund post verification with the original. POA should contain a clause empowering the POA holder to invest in securities on behalf of the NRI. Please note that a POA holder cannot nominate on behalf of the NRI.Q. Is nomination by NRIs allowed in the schemes of Reliance? Yes. Q. Can a resident Indian have an NRI as nominee? Yes. An NRI can be a nominee subject to the RBI Exchange Control Regulations from time to time. Q. Can an NRI have a joint account in a Mutual Fund with a resident Indian? Yes. An NRI investor can have a joint holding with a Resident Indian or a Non-Resident Indian in a scheme of Mutual Fund. Q. How does an NRI get updated on the performance of the schemes? The NRI investor can log on to www.pticindia.com and receive all the information on performance, portfolio, and returns of all schemes of Reliance Mutual Fund. Apart from the website the investor can also gather information as well as comparison with other mutual fund schemes on some of the financial websites. | |
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Copyright © 2008, paarTax & Investments Consultant (P) Limited - Mutual fund advisor provides information on Nri investment in mutual funds in India. Mutual Fund Advisor India, Mutual Fund Investment India, Wealth Management Planning Services, Mutual Fund Schemes India |
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