The Reserve Bank of India (RBI) has amended the rules on how Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs) and other residents outside India can make investments, receive sale proceeds and how such transactions can be reported to the central bank.
One of the major changes is that a person residing outside India (NRIs and OCIs) can now maintain a designated repatriable rupee account for investments made on a repatriable basis.
These regulations, known as Foreign Exchange Management (Mode of Payment and Reporting of NonDebt Instruments) (Amendment) Regulations, 2026, came into force on June 13, 2026 .
Here we discuss the main inclusions that the RBI amendment has made.
Investment rules for individual residing outside India
The changes made for such individuals are as follows-
Instructions on mode of payment and remittance of sale proceeds
1) The amount of consideration will be paid as inward remittance from abroad through banking channels. Or, out of funds held in any repatriable deposit account will be maintained as per the Foreign Exchange Management (Deposit) Regulations,2016.
2) A repatriable rupee account maintained in accordance with FEMA regulations will be designated by an individual resident outside India. The same will be used exclusively for investments permitted under this schedule.
(3) Subscription to National Pension System (NPS) by NRIs/OCIs will be paid as inward remittance from abroad through banking channels or out of funds held in any repatriable foreign currency or a rupee account or an NRO account.
Remittance of sale proceeds
The sale proceeds (net of taxes) of equity instruments will be remitted outside India or it will be credited to the designated rupee account of an NRI or an OCI.
The sale proceeds (net of taxes) of mutual fund units and NPS investments by NRIs/OCIs will be remitted outside India. It may also be credited to any account maintained at the option of an NRI/OCI investor.
Purchase or subscription of equity shares of companies incorporated in India on International Exchanges Scheme by permissible holder
Mode of payment
The amendment says that the amount of consideration for the subscription of equity shares of an Indian company listed on an International Exchange shall be paid under the following conditions -
The proceeds of purchase / subscription of equity shares of an Indian company listed on an International Exchange shall either be remitted to a bank account in India or deposited in a foreign currency account of the Indian company.
Remittance of sale proceeds
The new amendment says sale proceeds (net of taxes) of equity shares will be remitted outside India or may be credited to the bank account of the permissible holder maintained.
Amendment to Regulation 4 of the Principal Regulation
The RBI says that in sub-regulation (9) of Regulation 4 of the Principal Regulations, the existing provision shall be substituted by the following:
“LEC(Individual Foreign Investor - IFI): The designated Authorised Dealer Category I banks shall report to the Reserve Bank in Form LEC (IFI) the purchase or transfer of equity instruments by an individual person resident outside India including NRIs and OCIs on stock exchanges in India”.
