Sebi Proposes Easier KYC Norms For NRIs, OCIs, And Foreign Investors

The Securities and Exchange Board of India (Sebi) has proposed changes to the know your customer (KYC) framework that could make it easier for non-resident Indians (NRIs), overseas citizens of India (OCIs), and foreign nationals living overseas to invest in the Indian securities market.

Sebi’s consultation paper, issued on August 14, 2026, seeks to enable digital onboarding of individual persons resident outside India (PROIs) without requiring them to be physically present in India. The proposed relaxation would apply to investors residing in countries compliant with the Financial Action Task Force (FATF).

Under existing rule, a PROI undergoing digital KYC has to be physically present in India. Sebi has said this restriction has prevented intermediaries from offering complete digital onboarding to investors based outside the country.

Sebi has now proposed that such investors be allowed to submit KYC forms and supporting documents digitally using electronic signatures. They could also provide a cropped image of their specimen signature, with the wet signature verified during video in-person verification (VIPV).

The regulator also wants KYC records of individual PROIs to become portable. Under the draft framework, each attribute in the KYC record would be tagged as “validated” when verified against an official or source database. This would allow investors to use their KYC information with other intermediaries instead of repeating the entire process.

Another proposed change would allow intermediaries to rely on KYC completed by a Sebi-registered intermediary or an entity regulated by another financial sector regulator, using records obtained through the Central KYC Records Registry. The intermediary would, however, remain responsible for the client’s KYC and could carry out additional checks based on the investor’s risk profile.

Sebi has also proposed making email collection mandatory for PROI clients, while mobile number verification would be required “if feasible”. The move addresses the difficulty intermediaries face in verifying foreign mobile numbers through OTPs.

For address verification, investors could be allowed to self-declare their current address if the officially valid document submitted by them can be verified against an official or source database.

The list of authorities allowed to certify KYC documents could also be widened. Sebi has proposed including authorised officials of overseas bank branches that have relationships with Indian banks, alongside existing options, such as notaries, judges and Indian diplomatic missions.

The proposed digital process will come with safeguards, too. VIPV would require live GPS coordinates, checks against spoofed IP addresses, face-liveness detection, end-to-end encryption, and concurrent audits. The investor’s IP address would also have to originate from India or a FATF-compliant country and match the country declared in the KYC documents.

According to the consultation paper, the changes are intended to address representations from market participants and facilitate investment by PROIs. Sebi has said that smoother onboarding could help the “channelisation of overseas savings into Indian capital markets”.

The proposed framework would not extend to investors from FATF non-compliant countries, for whom the existing KYC process would continue. Sebi has asked for submission of public comments on the proposals by September 4, 2026.