The Reserve Bank of India has permitted authorised dealer banks to open repatriable rupee accounts for overseas individuals investing in listed Indian companies, operationalising the government's move to broaden participation in the domestic equity market beyond Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs). According to reports from Business Standard, the new norms came into effect immediately, with the central bank issuing a notification on June 13, 2026 and uploading it to its website on Monday. The amendment introduces designated repatriable accounts and revised LEC reporting obligations for individual foreign investors, with the changes effective from their publication date in the Official Gazette. As per Business Standard, the most important change is that overseas investors can now use a designated repatriable rupee account for investments and for receiving sale proceeds from those investments, making the process of investing, holding and repatriating money more streamlined.
The RBI amended foreign exchange regulations governing payment and reporting requirements for non-debt investments following changes made by the Centre to the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019. As reported by Business Standard, the amendment allows all individuals resident outside India to invest in equity instruments of listed Indian companies under Schedule III of the regulations. Under the revised framework, overseas individual investors can make investments through inward remittances or funds held in repatriable deposit accounts. The notification also updates Schedule XI concerning purchase or subscription of equity shares of Indian companies listed on international exchanges, prescribing permissible payment channels and treatment of sale proceeds. According to Business Standard, the government has now replaced previous language with "individual person resident outside India, including an NRI or an OCI," significantly widening the investor base eligible for direct participation in Indian equities.
Under the revised framework, overseas individual investors must designate a repatriable rupee account that will be used exclusively for investments under this route. According to the central bank's notification, investment amount must be paid as an inward remittance from abroad through banking channels or from funds held in a repatriable deposit account as per the Foreign Exchange Management (Deposit) Regulations, 2016. The move is expected to simplify the investment process for foreign individual investors and provide a dedicated banking channel for equity market transactions. Subscription to National Pension System by NRIs/OCIs shall be paid as inward remittance from abroad through banking channels or out of funds held in any repatriable foreign currency or rupee account maintained in accordance with the Foreign Exchange Management (Deposit) Regulations, 2016. As per Business Standard, under the amended rules, investments can be funded through inward remittances or repatriable deposits, while sale proceeds can flow back into the designated account and then be repatriated overseas after applicable taxes.
The RBI has significantly increased investment limits for overseas investors while expanding reporting requirements through the introduction of a new category — Individual Foreign Investor (IFI). As reported by Business Standard, the individual investment limit in a listed company has been increased from 5% to 10%, while the aggregate limit for all such overseas individual investors in a company has been raised to 24%. Under the revised framework, overseas individual investors can make investments through inward remittances or funds held in repatriable deposit accounts. The notification also revises provisions relating to investments in shares of Indian companies listed on international exchanges by specifying the permissible payment channels and treatment of sale proceeds. Regulation 4 has been amended to require designated Authorised Dealer Category-I banks to report purchases and transfers of equity instruments by overseas individuals through Form LEC (IFI), with the designated Authorised Dealer Category-I banks reporting to the Reserve Bank in Form LEC (IFI) the purchase/transfer of equity instruments by an individual person resident outside India including Non-Resident Indians or OCIs on stock exchanges in India.
The regulatory changes form part of a broader effort by policymakers to attract foreign capital, deepen participation in Indian financial markets, and provide greater flexibility to overseas investors seeking exposure to listed Indian companies. According to Business Standard, these changes represent a significant expansion of investment access beyond traditional NRI and OCI categories, potentially opening new avenues for foreign capital inflows into the Indian equity market. The amendments revise the mode of payment and remittance provisions under Schedule III relating to investments by individual persons resident outside India, including Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs), on a repatriation basis. As per Business Standard, the changes are part of a broader push to attract foreign capital into India, with the RBI announcing several measures including higher investment limits for overseas investors, easier access to government securities, incentives for foreign currency deposits such as FCNR(B) accounts, and relaxations for foreign investors in debt markets. These amendments reflect the RBI's ongoing efforts to facilitate foreign investment while maintaining robust regulatory controls, with investors and companies advised to review these changes carefully to ensure compliance and take advantage of the streamlined procedures for cross-border equity transactions.
