NRI invest in SGB

General
1

Hello,

As per FEMA guidelines, NRI’s are not allowed to buy SGB. I came to know that I was not a Indian resident at a time of purchase lately. What should I do? Please provide suggestions.

2

Hi @sarankathir While it’s true that, as per FEMA guidelines, NRIs cannot typically invest in SGBs, your situation might have a solution depending on the timing of your investment and residency change.

Here are 2 cases which you need to be aware of:

  • If you were an Indian resident at the time of purchase: You can continue holding the SGB until its maturity or exercise the option for early redemption (after the fifth year). Your NRI status doesn’t affect your existing SGB holding.
  • If you were already an NRI at the time of purchase: Unfortunately, investing in SGBs while being an NRI isn’t permitted. However, there’s an option if the SGB investment was held under the nomination facility.

Nomination Facility and NRIs:

The SGB scheme allows an original investor, who was initially an Indian resident, to designate an NRI as their nominee. In this scenario, if the original investor passes away, the NRI nominee can:

  • Have the security transferred into their name: But, this is only possible if the SGB is held until maturity or early redemption and the redemption proceeds and interest earned cannot be repatriated back to India.

Note:

To determine the best course of action for your specific situation, we highly recommend contacting your local branch or customer service hotline. They can access your investment details and provide personalized guidance based on the specific circumstances of your SGB purchase and NRI status.