NEW DELHI, India — Non-resident Indians (NRIs), Overseas Citizens of India (OCIs) and other foreign nationals living abroad may soon be able to complete digital KYC for accessing India’s securities market without travelling to India, under a proposal released by the Securities and Exchange Board of India (SEBI).
- SEBI has proposed easier digital KYC for individual Persons Resident Outside India (PROIs).
- The proposal could remove the requirement for eligible clients to be physically present in India during digital onboarding.
- KYC records could become portable across securities-market intermediaries, reducing repeated verification.
- Public comments on the proposal have been invited until September 4, 2026.
SEBI proposes to remove India-presence requirement
Under the existing framework, individual non-resident clients seeking digital onboarding are required to be physically present in India at the time of the process. SEBI said stakeholders have sought changes to this requirement as well as rules concerning original document verification, signatures and portability of KYC records.
The proposed framework would allow individual PROI clients living in FATF-compliant countries to complete KYC through digital modes without being physically present in India.
SEBI said the proposed changes are intended to simplify the process and enable smoother digital onboarding into the securities market.
KYC records may become portable between intermediaries
Another proposed change would allow intermediaries to rely on KYC completed by entities regulated by other financial-sector regulators. SEBI has also proposed portability of PROI KYC records between securities-market intermediaries.
This could reduce the need for overseas investors to undergo the same KYC procedure repeatedly when accessing different intermediaries.
The proposal also includes a requirement for intermediaries to collect email addresses from PROI clients to facilitate communication.
Overseas bank officials may get document certification role
SEBI has proposed expanding the list of authorised officials who can certify documents. Officials of overseas banks that maintain relationships with Indian banks could be included under the proposed framework.
The change is aimed at making document verification more accessible for clients completing the process from outside India.
SEBI proposes stronger safeguards for digital verification
The proposed framework includes additional safeguards for Video In-Person Verification, or VIPV. These include measures to prevent spoofed IP addresses, concurrent audits and compliance with cybersecurity requirements.
SEBI has also proposed face-liveness checks and safeguards against spoofing attempts during digital verification. The regulator said such measures should be designed without excluding people with special needs.
Intermediaries would continue to remain responsible for KYC even when they rely on verification carried out by another regulated entity. Additional measures could be applied depending on a client’s risk profile.
SEBI expects easier KYC to support overseas investment
SEBI said PROIs represent a significant and growing source of investment into India and argued that smoother onboarding could make it easier for the Indian diaspora to participate in domestic capital markets.
The regulator said easier onboarding could increase market participation and help channel overseas savings into Indian capital markets. It also said the review could contribute to improving the ease of doing business for intermediaries.
Proposal follows recent policy changes
The consultation comes after several policy changes aimed at facilitating overseas participation in India’s securities market. 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.
The Finance Ministry subsequently amended the Foreign Exchange Management (Non-debt Instruments) Rules in June 2026 to allow foreign nationals to invest in Indian securities without using the Foreign Portfolio Investor route.
In December 2025, SEBI had also relaxed the requirement for NRIs to be geo-tagged in India while completing re-KYC, allowing them to update KYC information from locations outside India.
FATF non-compliant countries excluded
The proposed digital onboarding framework would cover individual PROI clients living in FATF-compliant countries. Individuals residing in FATF non-compliant countries would continue to follow the existing KYC process.
For individual PROIs seeking registration as Foreign Portfolio Investors, SEBI said the existing provisions under its FPI framework would continue to apply.
Public comments invited until September 4
SEBI has invited public comments on the consultation paper until September 4, 2026. The proposal will therefore remain subject to the consultation process before any final regulatory framework is introduced.
Frequently Asked Questions
Can NRIs currently complete all securities-market KYC digitally from abroad?
The proposed changes are intended to remove the physical-presence requirement for eligible individual PROIs in FATF-compliant countries. The proposal is not yet a final regulatory framework.
Who would be excluded from the proposed digital KYC framework?
Individual PROI clients residing in FATF non-compliant countries would be excluded and would continue to follow the existing KYC process. Separate FPI provisions would also continue to apply to PROIs seeking FPI registration.
Source attribution: Information supplied by the user, based on the SEBI consultation proposal and the provided report.
Financial Disclaimer: This article is for informational purposes only and does not constitute investment, financial or legal advice. Securities-market investments involve risks. Readers should review official regulatory documents and consult a qualified professional before making investment decisions.
