The Securities and exchange Board of India (Sebi) is planning to create a third category of investors under the foreign portfolio investors (FPIs) system for Non-resident Indians (NRIs) to invest in Indian markets, said an Economic Times report citing sources. The move will increase the involvement of NRIs in local markets, the report added.

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Additionally, Sebi is planning to renounce licensing fees for NRIs registering as FPIs, which could be $2,000-5,000. Also, NRIs will soon be allowed to come in through custodian banks.

These development comes in the wake of government’s plan to merge the existing NRI route with the FPI system as announced in Interim Budget 2019-20. These measure will provide a more favourable regulatory setting to FPIs, especially NRIs, experts were quoted as saying in the Economic Times report.

After the merging of the two routes take place, NRIs will be able to invest up to the maximum FPI limit in a company, which in most sectors is 100 percent. The move will also open up the local markets for the participation of NRI-dominated funds.

Currently, NRIs invest in India through the portfolio investment scheme (PIS) route, which is controlled by the Reserve Bank of India (RBI). As per the rule, NRIs are allowed to invest only 5 percent in a listed company.

This PIS route will continue to exist for NRIs to make non-market investments including fixed deposits (FDs) and recurring deposits (RDs).