What changed
Previously, each branch designated for NRI PIS needed a separate Unique Code from RBI. Now, only the link office of the AD Category-I bank needs a Unique Code, and branches can administer the scheme without individual codes. Banks must still report all PIS transactions daily through the link office via ORFS.
What it means for you
This liberalization reduces administrative burden for banks by eliminating the need to get Unique Codes for every branch handling NRI PIS. Banks can now onboard more branches to serve NRIs faster, but must ensure strict compliance with FEMA restrictions on prohibited sectors (e.g., chit funds, real estate, tobacco) and maintain robust reporting through the link office.
What you must do
- Update internal policies to allow all branches to administer NRI PIS under the bank's single Unique Code.
- Ensure the designated link office reports daily PIS transactions via ORFS in form LEC (NRI) for the entire bank.
- Provide RBI with complete contact details of the link office before starting operations.
- Train branches on prohibited sectors (chit funds, Nidhi, real estate, tobacco, TDRs) and FEMA compliance as per Annex-A and Annex-B.
- Verify that OCBs are not allowed as investors under PIS, as per FEMA regulations.
Who it affects
AD Category-I banks, NRI investors using Portfolio Investment Scheme, Branch-level staff handling NRI PIS transactions, Compliance and reporting teams at banks
Do we still need to report PIS transactions daily?
Yes, the link office must continue reporting all PIS transactions daily via ORFS in form LEC (NRI), as per existing practice.
Can NRIs invest in any company under PIS now?
No, NRIs cannot invest in companies engaged in chit funds, Nidhi, agriculture, real estate (except specified developments), farm houses, tobacco products, or TDRs, as per FEMA restrictions.
What happens to existing branch-level Unique Codes?
RBI has dispensed with branch-level Unique Codes. Only the link office code is needed. Existing branch codes may be phased out; banks should confirm with RBI.