UPSC Prelims Practice Questions — Budget ups limit but NRIs hold 0.6% of NSE firms
Q1. As per the Prime Database ownership tracker for Q3FY26, what was the approximate share of Non-Resident Indians (NRIs) in the total shareholding of NSE-listed companies?
- A. 0.6%
- B. 4.8%
- C. 7.3%
- D. 23%
Q2. The Portfolio Investment Scheme (PIS), through which NRIs invest in listed Indian securities, is operated under which one of the following legal instruments?
- A. Schedule 3 of the Foreign Exchange Management Act, 2000
- B. Section 6 of the Foreign Exchange Regulation Act, 1973
- C. Schedule II of the SEBI (Foreign Portfolio Investors) Regulations, 2019
- D. Section 188 of the Companies Act, 2013
Q3. With reference to the rules governing NRI investment in Indian listed companies under the Portfolio Investment Scheme (PIS), consider the following statements comparing the position before and after the Union Budget 2026-27:
1. The ceiling on an individual NRI's shareholding in a company has been raised from 5% to 10% of paid-up capital.
2. The aggregate ceiling for all NRIs taken together has been raised from 10% to 24% of paid-up capital.
3. Even after the Budget 2026-27 change, prior approval of the Reserve Bank of India continues to be mandatory for the aggregate NRI holding to exceed 10% of paid-up capital.
Which of the statements given above is/are correct?
- The ceiling on an individual NRI's shareholding in a company has been raised from 5% to 10% of paid-up capital.
- The aggregate ceiling for all NRIs taken together has been raised from 10% to 24% of paid-up capital.
- Even after the Budget 2026-27 change, prior approval of the Reserve Bank of India continues to be mandatory for the aggregate NRI holding to exceed 10% of paid-up capital.
- A. 1 and 2 only
- B. 2 and 3 only
- C. 1 and 3 only
- D. 1, 2 and 3
Q4. In the context of Indian capital markets, the term 'Portfolio Investment Scheme (PIS)' refers to which one of the following?
- A. A scheme under which NRIs and OCIs purchase and sell shares and convertible debentures of Indian listed companies through a designated bank branch, with daily monitoring of company-wise ceilings by the RBI
- B. A SEBI-administered scheme that permits foreign portfolio investors to acquire unlisted equity of Indian companies subject to sectoral caps
- C. A Government of India scheme that allows resident Indians to invest abroad through Liberalised Remittance Scheme accounts in foreign portfolios
- D. A scheme that allows foreign direct investors to acquire more than 10% in an Indian listed company through the automatic route without any sectoral cap
Q5. With reference to the framework of the Portfolio Investment Scheme (PIS) as it stands after the Union Budget 2026-27 announcements, consider the following statements:
1. The individual ceiling on shareholding by a single NRI in a listed Indian company is 10% of paid-up capital.
2. The aggregate ceiling on shareholding by all NRIs taken together in a listed Indian company is 24% of paid-up capital.
3. NRI investments under the scheme are routed through a Designated Bank Branch and monitored by the Reserve Bank of India on a daily basis.
4. Every NRI investing through the PIS route is required to obtain a separate registration from the Securities and Exchange Board of India (SEBI) as a Foreign Portfolio Investor.
Which of the statements given above is/are NOT correct?
- The individual ceiling on shareholding by a single NRI in a listed Indian company is 10% of paid-up capital.
- The aggregate ceiling on shareholding by all NRIs taken together in a listed Indian company is 24% of paid-up capital.
- NRI investments under the scheme are routed through a Designated Bank Branch and monitored by the Reserve Bank of India on a daily basis.
- Every NRI investing through the PIS route is required to obtain a separate registration from the Securities and Exchange Board of India (SEBI) as a Foreign Portfolio Investor.
- A. 4 only
- B. 1 and 2 only
- C. 3 and 4 only
- D. 1, 2 and 3 only