NRI Portfolio Investment Scheme (PIS): Charges, Renewal, and Account Closure Process

Any NRI who wants to buy and sell listed Indian shares on a delivery basis and eventually send the money home runs into the same requirement: a Portfolio Investment Scheme account, commonly shortened to PIS.

It is not optional, it is not a premium add on, and it is the specific mechanism through which the Reserve Bank of India keeps track of how much of an Indian company NRIs collectively own.

What is less well understood is that the scheme itself changed twice in the past eighteen months, which means a fair amount of the PIS guidance circulating online, some of it written only a year ago, is already describing an out of date version of the rules.

This matters beyond a compliance technicality. PIS governs charges an NRI investor will pay for as long as the account stays open, and getting the account maintenance, the periodic KYC refresh, or the closure and bank transfer process wrong can freeze an account or delay a repatriation at exactly the moment it is least convenient.

A PIS account is a designated bank account, linked to an NRE savings account, through which an NRI routes purchases and sales of listed Indian shares and convertible debentures on a recognised stock exchange.

It is defined under Schedule 3 of the Foreign Exchange Management Act, 2000 and administered by RBI authorised banks on the regulator's behalf. Every trade made through the PIS route is automatically reported to RBI by the bank, which is what allows the regulator to track how much of any single company's shares NRIs hold in aggregate.

PIS is required specifically for secondary market equity delivery trades, buying or selling listed shares on the exchange for repatriable investment. It is not required for mutual funds, IPO applications, or government bonds, all of which can be accessed through a simpler non PIS route linked to an NRE or NRO account. Intraday trading, short selling and margin trading are not permitted under PIS at all, since every purchase must be settled by taking delivery of the shares before they can be sold.

The first change took effect in 2025. NRIs no longer need to maintain separate NRE PIS and NRO PIS accounts. A single NRE PIS account now covers both repatriable and non repatriable investment, a genuine simplification for anyone opening a fresh account, though NRIs still holding an older, separate NRO PIS account from before the change should confirm its current status with their bank.

The second, larger change arrived with Budget 2026, announced on February 1, 2026. The individual investment limit for persons resident outside India, including NRIs, in a single listed Indian company was doubled from 5% to 10% of that company's paid up capital, and the aggregate limit across all such investors combined was raised from 10% to 24%.

The government also introduced a new direct equity investment pathway for overseas individuals, extending beyond NRIs and OCIs to certain foreign nationals, that removes the earlier requirement to route such investment through a registered Foreign Portfolio Investor. As of the most recent reporting available, RBI was still in the process of operationalising the detailed procedures for this pathway, so specific timelines are worth confirming directly with a designated bank.

The PIS account most guides describe was already out of date before this article was written. It changed twice in eighteen months.

Charges are set by each designated bank rather than fixed centrally by RBI, but they consistently fall into the same three categories.

Charge	Typical Range	When It Applies
PIS issuance or setup charge	A one time fee, varies by bank	When the PIS permission is first granted
Account maintenance charge	Periodic, often annual, varies by bank	For as long as the PIS account remains open
Transaction or RBI reporting charge	Roughly Rs 75 to Rs 100 per trade date	Charged separately for each purchase and each sale, regardless of quantity or value
TDS on capital gains	20% short term; 12.5% long term above Rs 1.25 lakh a year	Deducted automatically by the bank at the time shares are sold
Forex conversion spread	Bank's prevailing rate spread	When sale proceeds are converted and repatriated overseas

The reporting charge is worth noting closely since it applies per trade date rather than per rupee traded, which means frequent small trades accumulate this cost quickly compared with fewer, larger transactions. Some banks also tier this charge by relationship level, so a premium banking customer at the same institution may pay a different reporting fee than a standard account holder.

A PIS permission letter itself does not carry a fixed expiry date requiring periodic renewal in the way a licence or a passport does. What does require regular attention is the Re KYC process RBI mandates for the underlying NRE account the PIS is linked to. Banks follow a risk based approach to how often a given customer must refresh their KYC, so the exact frequency varies by individual risk category rather than following one fixed calendar for everyone.

If Re KYC is not completed within the timeframe a bank specifies, the bank can temporarily freeze the account, blocking withdrawals, purchases and transfers until the update is completed. Since a frozen NRE account effectively halts PIS trading too, treating Re KYC notices as the closest thing to a renewal deadline is the safer way to think about it.

Beyond the individual and aggregate limits raised in Budget 2026, RBI monitors NRI shareholding in every listed company continuously through the designated banks' reporting. The National Securities Depository Limited maintains a Caution List, covering companies where NRI holdings are approaching the prescribed ceiling, and a Watch List, covering companies that have already reached it and where no further NRI purchases are permitted under PIS.

Checking a company against these lists before placing a large purchase order is a simple, often overlooked step that avoids a rejected trade.

Limit	Before Budget 2026	From Budget 2026
Individual investor limit, single company	5% of paid up capital	10% of paid up capital
Aggregate limit across all NRIs, single company	10% of paid up capital	24% of paid up capital
Route for broader overseas individual investment	Generally required routing via registered FPIs	New direct pathway introduced, extending beyond NRIs and OCIs

An NRI can hold only one designated bank for PIS at any time, and switching banks means closing the existing arrangement first rather than simply opening a second one alongside it. Most major banks maintain a specific form for this, often titled something like a PIS permission cancellation cum account closure form.

Step	What Happens
Submit closure request	File the bank's PIS cancellation cum account closure form with the existing designated bank
Settle open positions	Ensure no pending trades or unsettled transactions remain in the account
Obtain a No Objection Certificate	The existing bank issues an NOC confirming the account can be closed and transferred
Obtain a Certified PIS Holding statement	The existing bank certifies the current holdings being carried over
Apply at the new bank	Submit the NOC and holding statement to open a fresh PIS account elsewhere

A handful of PIS rules trip up even experienced NRI investors, mostly because they are easy to forget between trades:

• An NRI cannot buy and sell shares of the same company within the same settlement cycle through a PIS account, since delivery must be taken before a subsequent sale, which rules out same day round trips entirely.

• Only one designated bank can hold a PIS mandate at a time, and that bank account is typically linked to only one broker, so consolidating or switching brokers usually means a formal bank level change too.

• Policies on joint holding vary by bank. Some allow a PIS account to be opened in joint names but restrict the actual PIS trading approval to the primary holder alone, requiring the joint holder to open a separate account to trade independently, while others do not permit joint PIS accounts at all.

• Certain sectors, including real estate other than infrastructure, agricultural land, plantations and chit funds, remain off limits to PIS investment regardless of the company's listing status.

• The NRE account linked to PIS should not be used for unrelated transactions like IPO applications, mutual fund purchases, bill payments or loan instalments, which belong on a separate, non PIS account.

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Rules, charges and processes described are drawn from RBI regulations, government announcements and individual bank disclosures as publicly available at the time of writing, and vary by bank and are subject to change, particularly as RBI continues operationalising the Budget 2026 changes described here. Readers should confirm current charges, forms and procedures directly with their designated bank and consult a SEBI registered investment adviser or qualified tax professional before making investment decisions.