KYC has long been one of the more cumbersome parts of investing in India, particularly for people living outside the country. For an investor sitting in Mumbai, completing a KYC requirement may be a routine exercise. But for an NRI, Overseas Citizen of India (OCI) or foreign national living abroad, the same process can involve document certification, physical presence and repeated submission of information.
SEBI now wants to make this process easier. The regulator has proposed a number of changes to the KYC framework for individual Persons Resident Outside India (PROI), including NRIs, OCIs and foreign nationals. The proposals are aimed at making onboarding more digital, reducing duplication and making it easier for eligible investors to deal with India’s securities market.
The biggest change could be the removal of the physical presence requirement for PROI clients from FATF-compliant countries. If implemented, eligible investors would be able to complete their KYC through digital modes without having to come to India. This is a practical step because asking an overseas investor to travel to India simply to complete a procedural requirement can be unnecessarily costly and time-consuming.
Another important proposal is KYC portability. At present, investors can face the inconvenience of providing similar KYC information when dealing with different financial intermediaries. SEBI has proposed allowing KYC records to be portable across securities market intermediaries. It has also proposed allowing intermediaries to rely on KYC carried out by entities regulated by other financial sector regulators. If implemented properly, this could significantly reduce repeated paperwork.
SEBI has also proposed making the collection of email IDs part of the process for PROI clients. This appears to be a simple change, but it can improve communication between investors and intermediaries, particularly when the investor is living outside India.
Document certification is another area where overseas investors can face difficulties. SEBI has proposed expanding the list of authorised officials who can certify documents to include officials of overseas banks that have relationships with Indian banks. This could make the certification process more accessible for investors who are not physically present in India.
However, making KYC easier does not mean that the regulator can simply reduce safeguards. Digital onboarding also creates risks around identity verification, fraud and cyber security. SEBI has therefore proposed specific safeguards for Video In Person Verification (VIPV), including measures to prevent spoofed IP addresses, concurrent audits and compliance with cyber security requirements.
This balance is important. A KYC system that is too complicated can discourage genuine investors, while a system that is too relaxed can create opportunities for fraud and misuse. The challenge for SEBI will be to remove unnecessary procedural hurdles without weakening the basic purpose of KYC — establishing that the person investing is genuine and identifiable.
The proposal is therefore not simply about making paperwork easier. It is about moving towards a KYC system where technology does more of the routine work while regulatory safeguards remain in place.
SEBI has invited public comments on the consultation paper, with September 4, 2026, set as the last date for submitting comments. The consultation paper was issued on August 14, 2026.
If these proposals are eventually implemented, NRIs, OCIs and foreign nationals could find it considerably easier to enter and operate in India’s securities market, particularly because they would not have to repeatedly deal with physical verification and duplicate KYC requirements.
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