Why does a broker charge higher brokerage for NRI trading account?

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Stock brokers charge higher brokerage to NRI customers because of additional complexity with NRI trading due to RBI and FEMA regulations.

While trading on a repatriation basis through PIS-NRE Account, every time a customer buys the shares, the broker sends the Contract Note to the bank and then the bank release the funds to the broker.

The process is more complicated when NRI trading on repatriation basis in equity derivatives segments (F&O's). An NRI needs an additional account with Clearing Agents who does the settlement of the trades instead of the broker.

Note:

• NRI's trading with NRO Non-PIS Account is much simpler in terms of managing compliance. The broker does not have to involve banks and clearing agent for trading in equity or F&O.
• Zerodha charges ₹20 per trade for resident Indian account and ₹200 per trade brokerage for the NRI trading account.
• ICICI Directcharges 1.25% brokerage for NRI equity delivery trading for monthly transactions less than ₹5 lakhs. The charges are below 0.50% for resident Indian trading account.