Why does broker charges higher brokerage for NRI trading account?

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ICICI Direct charges 1.25% brokerage for NRI equity delivery trading for monthly transactions less then Rs 5 lakhs. The charges are below 0.50% for resident Indian trading account.

Zerodha, the largest discount broker in India charges Rs 20 per trade for resident Indian account. Zerodha charges Rs 200 per trade brokerage for NRI trading account.

The higher brokerage charge is because of extra complexity the NRI accounts add for the broker.

When NRI customer buy the shares through the broker, the broker send the Contract Note to the bank and then only bank release the funds to the broker. This causes an incremental effort to service a NRI and thus the higher brokerage charges.

The process is more complicated if NRI trades in equity derivatives segments (F&O's). As there is a separates clearing or settlement process for NRI's through CP codes.