A Non-Resident Indian (NRI) is an individual who resides outside India but holds an Indian Citizenship. An NRI cannot use the same Demat Account that was used by him/her during their status as an Indian Resident and will be required to close the same upon acquiring an NRI status.
While there are no restrictions on an NRI opening a Demat Account in India, they are certainly required to comply with the rules of the Foreign Exchange Management Act (FEMA).
In order to get started in the Indian Markets, they are required to link their Demat Account to their Bank Account. There are two types of bank accounts held by NRIs, i.e., Non-Resident External (NRE) and Non-Resident Ordinary (NRO). While an NRE Account allows you to deal only in the Equity Segment, an NRO Account on the other hand enables you to dabble both in Equity and Derivatives.
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