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.