No. NRIs cannot register or use foreign (overseas) bank accounts to invest in Indian mutual funds.
Regulatory Context (SEBI & RBI – FEMA Guidelines):
-
Investments must be made only through Indian Rupee–denominated accounts:
-
NRE Account: For repatriable investments (funds can be sent abroad).
-
NRO Account: For non-repatriable investments (funds remain in India).
-
FCNR Account: Can transfer funds to NRE/NRO accounts but cannot be used directly for investments.
Essential Details:
-
Mutual Funds cannot accept foreign currency or transactions from overseas accounts.
-
All purchases, redemptions, and payouts must be through the investor’s registered NRE/NRO account in India.
-
Overseas bank details cannot be registered for transactions or payouts.
-
FATCA compliance still requires disclosure of overseas tax residency and bank details, but these are not used for investment transactions.