Now Reading: SEBI proposes fully digital KYC for NRIs, removing physical presence rule
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SEBI proposes fully digital KYC for NRIs, removing physical presence rule
SEBI proposes fully digital KYC for NRIs, removing physical presence rule
The Securities and Exchange Board of India (SEBI) has proposed a fully digital Know Your Client (KYC) and onboarding process for retail non-resident Indians (NRIs), Overseas Citizens of India (OCIs) and foreign…
The Securities and Exchange Board of India (SEBI) has proposed a fully digital Know Your Client (KYC) and onboarding process for retail non-resident Indians (NRIs), Overseas Citizens of India (OCIs) and foreign nationals living in Financial Action Task Force (FATF)-compliant countries. The move would remove the current requirement for physical presence in India and geo-tagging within the country, which has been a major hurdle for overseas investors.
Under the proposal, eligible investors can complete KYC digitally from their country of residence using video verification and paperless documentation, with a minimum investment ticket size of $5,000. Industry experts welcomed the move, saying it reduces logistical friction for retail NRIs who earlier avoided investing in India due to documentation challenges and the need to courier physical papers internationally.
SEBI released a consultation paper on the proposal earlier this month and has sought public feedback before finalising the rules.
Indian Opinion Analysis
The proposal addresses a structural bottleneck: India's equity and mutual fund markets have seen strong domestic inflows, but NRI participation has lagged because the KYC process effectively required the investor to be in India. The RBI's Liberalised Remittance Scheme already allows NRIs to repatriate up to $250,000 per financial year, so the investment ceiling is not the constraint. What changes is the onboarding friction: removing geo-tagging and in-person verification cuts the time to open an account from weeks to hours. The key question is whether SEBI's final circular will mandate audit trails that intermediaries say are costly, and whether the current underperformance of Indian equities offsets the convenience gain. The regulator's comment window closes before the board meeting scheduled for later this quarter.
Source: livemint.com
This story was synthesised by AI from the source linked above.
