NRIs, OCIs abroad may get easier KYC under SEBI proposal: Key changes

Non-resident Indians (NRIs), Overseas Citizens of India (OCIs) and foreign nationals living abroad may soon be able to complete their KYC digitally without travelling to India, under a proposal put forward by markets regulator Securities and Exchange Board of India (SEBI).

SEBI has proposed relaxing the existing Know Your Client (KYC) framework for individual Persons Resident Outside India (PROIs), with the objective of making it easier for them to access the Indian securities market.

India-presence requirement proposed to be removed

Under the existing framework, one of the requirements for digital onboarding of non-resident clients is that the client should be physically present in India at the time of onboarding.

SEBI said it has received multiple representations from stakeholders seeking relaxation of this requirement, as well as changes relating to verification of original Officially Valid Documents, signature affixation and portability of KYC records.

The regulator's stated objective is to “simplify the said process to enable seamless digital on-boarding in the securities market.”

Under the proposed framework, individual PROI clients residing in FATF-compliant countries would be allowed to complete KYC through digital modes without being physically present in India.

KYC may become portable across intermediaries

SEBI has proposed allowing intermediaries to rely on KYC undertaken by entities regulated by other financial-sector regulators.

It has also proposed making KYC records of PROI clients portable across intermediaries in the securities market. This could reduce the need for investors to repeat the KYC process when dealing with multiple intermediaries.

The regulator has further proposed mandating that PROI clients collect email IDs to facilitate communication with intermediaries.

The list of authorised officials permitted to certify documents could also be expanded to include officials of overseas banks that have relationships with Indian banks.

Digital verification to get additional safeguards

SEBI has proposed safeguards for Video In-Person Verification (VIPV), including measures for spoofed IP prevention, concurrent audit and cyber-security compliance.

The consultation paper also envisages checks for face liveness and spoofing attempts during digital verification, while ensuring that such safeguards do not exclude persons with special needs.

SEBI has also proposed that the intermediary would retain responsibility for KYC even when it relies on KYC undertaken by another regulated entity, with enhanced measures to be carried out depending on the client's risk profile.

SEBI sees scope to increase overseas participation

SEBI said PROIs represent a “significant and growing pool of investment into India” and that smoother onboarding could make investing back home easier for the Indian diaspora.

“Enabling smooth on-boarding would enhance market participation,” the regulator said, adding that this could lead to “channelisation of overseas savings into Indian capital markets.”

The regulator also said the review of the KYC process would contribute to “ease of doing business for the intermediaries.”

The proposal comes amid recent policy changes aimed at facilitating overseas investment in Indian securities. SEBI noted that the Union Budget for 2026-27 announced that individual PROIs would be permitted to invest in equity instruments of listed Indian companies through the Portfolio Investment Scheme.

FATF non-compliant countries excluded

The proposed digital onboarding framework would apply to individual PROI clients except those residing in FATF non-compliant countries. The existing KYC process would continue to apply to such clients.

For individual PROIs seeking registration as Foreign Portfolio Investors, the existing provisions under SEBI's FPI framework would continue to apply.

SEBI has invited public comments on the consultation paper until September 4, 2026.