SBI Portfolio Investment Scheme (PIS) account opening application

The provided document outlines the Portfolio Investment Scheme (PIS) offered by the State Bank of India (SBI), specifically through its NRI Branch in Mumbai. This scheme enables Non-Resident Indians (NRIs) to invest in the Indian secondary stock market with repatriation benefits.

Core Investment Features

• Eligible Securities: NRIs can purchase shares, convertible debentures, bonds of Indian companies, Government securities, treasury bills, and units of mutual funds.

• Repatriation Basis: Investments must be made using inward remittances in foreign exchange or funds from NRE/FCNR (B) accounts.

• Investment Limits: An NRI’s individual holding in a single Indian company cannot exceed 5% of the company’s paid-up capital or each series of convertible debentures.

   

• Trading Requirements: Transactions must be conducted through a registered stock broker on a recognized Indian stock exchange. NRIs are prohibited from intraday trading, short-selling, or speculative transactions.

Operational Requirements

• Dedicated PIS Account: NRIs must open a separate PIS NRE account specifically for secondary market investments; this is independent of a standard NRE savings account.

• Exclusivity: An NRI is permitted to maintain only one PIS account with a single designated bank branch in India.

• Documentation and Reporting: Original purchase and sale contract notes must be submitted to the designated SBI branch within 24 to 48 hours of execution for reporting to the RBI.

• Dematerialization: All shares must be held in dematerialized (Demat) form; physical shares are not permitted under this scheme.

Mandatory Compliance and Fees

• Taxation: Capital gains tax is calculated on a First-In-First-Oust (FIFO) basis, and tax is deducted at source (TDS). Loss set-offs against gains from other transactions are not permitted for TDS purposes.

• Maintenance: A minimum monthly average balance of ₹3,000 must be maintained in the account.

• Fees:

  • PIS/RBI Approval Fee: ₹500 + GST.

     

  • Annual Maintenance Fee: ₹900 + GST (starting from the second year).

     

Restricted Transactions

• Private Arrangements: Shares purchased under PIS cannot be transferred via private sale or gift without prior RBI approval.

• Banned Scrips: NRIs are prohibited from purchasing “Banned” or “Cautioned” scrips as identified by the RBI.

   

• Third-Party Tools: Cheque books and ATM/Debit cards are not issued for PIS savings accounts, and third-party transactions are prohibited.