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By Vipul Jain | 10 Sep, 2025
In today's world, with the help of the internet, you can always open a demat account and invest in the stock market from anywhere in the world. As an NRI, a demat account is the best option for buying and selling shares. To open a demat account, you will need a few documents, one of which is a Power of Attorney.
In this blog post, we have discussed the need and the use of a PoA while investing in the stock market. Read this article till the end to have a wide perspective on the types and benefits of PoA in the share market.
A power of attorney is a legal document that gives the authority to another person to act on your behalf. They can only act on the subjects mentioned in the document. For NRIs, it is very helpful because being present in India every time they have any financial or legal matter is not possible.
In case of the demat accounts, the PoA gives the authority to the online brokers to take certain decisions on your account. PoA is completely safe because it gives limited authority to the broker and is practiced normally in India. There is no breach of privacy or security in the case of a power of attorney.
There are two different types of POA in the Stock Market:
Although a power of attorney is not necessary to open a demat account, it does offer several benefits. Here they are:
1. Use PoA to sell the shares: When you are involved in investing in the stock market, there are two things involved: buying and selling. You can buy the shares without the PoA, but selling the shares without a PoA is not always possible. The process of buying a share is quite simple; you just have to make the payment, and the shares are directly transferred to your demat account.
But selling the shares required the involvement of an online broker, a legal authority, and powers. The online broker debits the shares from your demat account and transfers them to the stock exchange. For this process, the broker needs a PoA because the shares are leaving your account.
2. Use PoA to sell a large amount of shares: If you don't have a PoA, then there are other means to sell your shares, like using CDSL TPIN (Central Depository Services Ltd. Transaction Personal Identification Number). By this method of selling, you can only make transactions of Rs 1 Crore a day. In some cases, where you have to sell shares of more than Rs 1 crore in a day, drafting a PoA is important.
3. Use PoA for a quick process: There is one more way to sell your shares without a PoA, the Delivery Instruction Slip (DIS). This process involves submitting the DIS with all the important documents to the broker. Then the broker will debit the shares from your account after receiving the DIS. This whole process is very time-consuming. So, using a PoA will be a quick and prompt process that can also be done online.
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Chat NowHere are a few things that you should keep in mind before signing a PoA:
If you are an NRI and want to manage your finances in India, then you can open your NRE account and NRO account with the help of Visament. On our website, we provide various types of services. You can also draft a Power of Attorney with the help of our experts.
Our team works 24/7 to assist the clients, and the whole process is transparent. You can check out the updates on our website while the application is being processed. It can save you the whole tiring process, and you don't even have to visit the offices physically.
Yes, NRIs can give a Power of Attorney to a trusted person within or outside India to manage their financial and legal matters in India.
An Indian POA does not automatically cancel after you close the bank account. It will only be cancelled when the grantor revokes it, the grantor becomes incapacitated, or the purpose is fulfilled.
No, the POA and the nominee don't need to be linked in any sense. The grantor hires a POA to manage the financial and legal matters, whereas a nominee gets the assets after the death of the owner.
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