Sebi eases KYC norms for NRIs, OCIs, allows digital onboarding from December 3
SEBI has relaxed KYC requirements for NRIs, OCIs and foreign nationals, allowing eligible overseas clients in FATF-compliant countries to complete onboarding digitally. The revised framework introduces video verification, electronic documents and ...
By Kumar Gaurav, ETMarkets.com | Updated:
Agencies
SEBI simplifies overseas investor onboarding by permitting digital KYC, video verification and reusable records for eligible NRIs, OCIs and foreign nationals residing abroad.
The Securities and Exchange Board of India (Sebi) has eased Know Your Customer (KYC) requirements for non-resident Indians (NRIs), Overseas Citizens of India (OCIs) and foreign nationals, allowing them to complete the onboarding process digitally while residing overseas, subject to specified conditions.
Under the revised framework, market intermediaries can accept digital submission of KYC information and supporting documents from individual persons resident outside India (PROIs) located in countries compliant with the Financial Action Task Force (FATF), according to the regulator's latest circular.
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The new provisions will come into effect from December 3, 2026, 30 days from the date of issuance of the circular. The relaxation will not extend to clients residing in FATF non-compliant countries, for whom the existing KYC process will continue to apply.
The move is aimed at easing the onboarding process for overseas clients, which was earlier constrained by a requirement under Sebi's KYC Master Circular that clients be physically present in India during digital KYC. The revised framework removes this geographical restriction for eligible overseas clients.
ALSO READ: Lenskart Q2 Results: Profit zooms 122% YoY to Rs 227 crore; revenue grows 36%
Under the new norms, intermediaries can collect KYC information through physical forms, applications, websites or other digital modes. Clients can submit scanned copies of physical KYC forms under electronic signatures or digitally completed forms with electronic signatures.
The regulator has also permitted intermediaries to rely on KYC records maintained by other Sebi-registered intermediaries through KYC Registration Agencies (KRAs), as well as records maintained by entities regulated by other financial sector regulators through the Central KYC Records Registry (CKYCRR).
The KRA will be required to tag individual attributes in a client's KYC record as "validated" wherever these have been verified against official or source databases. Sebi has also clarified that KYC records will remain portable and can be shared with other intermediaries, irrespective of whether every individual attribute has been validated.
The revised framework lays down detailed requirements for collecting and verifying client information, including PAN, passport, OCI card, overseas address, specimen signature, mobile number and email ID.
Intermediaries will be required to collect the client's PAN and verify it against the Income Tax database without insisting on the production of the original PAN card or a copy of it. The KRA will also verify the PAN and the client's name against the database and mark the relevant attribute as "validated".
For passport verification, intermediaries will have to collect a copy of the client's passport and, wherever applicable, the OCI card. The passport will be verified wherever feasible, with the KRA also undertaking verification where possible.
For proof of identity and address, intermediaries will have to collect any one of the specified officially valid documents or deemed officially valid documents. The circular clarifies that the overseas address will be treated as the current address for an individual PROI client.
Where original documents are not physically produced for verification, intermediaries can accept equivalent electronic documents available through DigiLocker, electronic documents issued by the relevant authority through a verifiable mechanism, Aadhaar-based e-KYC authentication or copies attested by specified certifying authorities.
These authorities include notaries, authorised officials of overseas branches of scheduled commercial banks registered in India, branches of overseas banks having relationships with Indian banks, court magistrates, judges, and Indian embassies or consulates in the country where the client resides.
The regulator has also provided for video-based in-person verification (VIPV) where physical in-person verification is not feasible. However, the process will have to meet prescribed safeguards, including uninterrupted video recording, live GPS coordinates and time stamps, facial liveness checks and end-to-end encryption.
The client's IP address must originate from India or a FATF-compliant country and match the country specified in the KYC form and supporting documents. The infrastructure must also prevent connections from spoofed IP addresses, VPNs and proxy servers.
An authorised official of the intermediary must be present during the VIPV process, which will be subject to concurrent audit to ensure the integrity and acceptability of the verification outcome.
The circular also allows clients to submit specimen signatures digitally through a cropped image under electronic signature. However, in such cases, the client will have to provide a wet signature before the intermediary during VIPV, which must verify whether it matches the signature submitted earlier.
Intermediaries will also be permitted to collect Indian or international mobile numbers and email IDs from overseas clients. These details will have to be verified through an OTP or another verifiable mechanism, wherever feasible. If the mobile number cannot be verified, all communications with the client must be sent to the verified email address.
The regulator has further eased the requirement for repeat KYC by allowing intermediaries to retrieve existing client records from KRAs and CKYCRR using the client's PAN and CKYC ID, wherever available.
Additional KYC information will be sought only in cases where existing records have changed, are incomplete or do not meet the applicable norms, the validity of identity documents has expired, or the intermediary considers further verification necessary for enhanced due diligence or risk profiling.
Intermediaries can also rely on KYC undertaken by another Sebi-registered intermediary, based on records obtained from the KRA. Similarly, they can rely on KYC undertaken by entities regulated by other financial sector regulators, based on records available through CKYCRR.
However, the ultimate responsibility for KYC will continue to rest with the intermediary, including undertaking enhanced due diligence in accordance with the client's risk profile.
Intermediaries will have to provide completed KYC information to the KRA within three working days of completing the process. They must also ensure that the infrastructure used for KYC complies with Sebi's Cyber Security and Cyber Resilience Framework.
The circular states that all documents submitted by individual PROI clients must be in English. Documents in other languages will have to be translated into English and attested by a certifying authority before submission.
The revised framework will also apply to re-KYC of individual PROI clients residing in FATF-compliant countries.
However, foreign nationals seeking registration as Foreign Portfolio Investors (FPIs) will continue to be governed by the applicable provisions of Sebi's Master Circular for Foreign Portfolio Investors, Designated Depository Participants and Eligible Foreign Investors.
The new provisions will supersede the corresponding requirements under the existing KYC Master Circular, as well as specified earlier instructions on trading account opening and geo-tagging relaxation for NRIs undertaking re-KYC.
KYC processes completed by intermediaries before December 3, 2026, will continue to be governed by the existing provisions.
Disclosure: This article has been written by Kumar Gaurav, who is not a Sebi-registered Research Analyst or an Investment Adviser. Gaurav and their ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective Sebi-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here
Under the revised framework, market intermediaries can accept digital submission of KYC information and supporting documents from individual persons resident outside India (PROIs) located in countries compliant with the Financial Action Task Force (FATF), according to the regulator's latest circular.
For live updates on US Markets, click here
The new provisions will come into effect from December 3, 2026, 30 days from the date of issuance of the circular. The relaxation will not extend to clients residing in FATF non-compliant countries, for whom the existing KYC process will continue to apply.
The move is aimed at easing the onboarding process for overseas clients, which was earlier constrained by a requirement under Sebi's KYC Master Circular that clients be physically present in India during digital KYC. The revised framework removes this geographical restriction for eligible overseas clients.
ALSO READ: Lenskart Q2 Results: Profit zooms 122% YoY to Rs 227 crore; revenue grows 36%
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Under the new norms, intermediaries can collect KYC information through physical forms, applications, websites or other digital modes. Clients can submit scanned copies of physical KYC forms under electronic signatures or digitally completed forms with electronic signatures.
The regulator has also permitted intermediaries to rely on KYC records maintained by other Sebi-registered intermediaries through KYC Registration Agencies (KRAs), as well as records maintained by entities regulated by other financial sector regulators through the Central KYC Records Registry (CKYCRR).
The KRA will be required to tag individual attributes in a client's KYC record as "validated" wherever these have been verified against official or source databases. Sebi has also clarified that KYC records will remain portable and can be shared with other intermediaries, irrespective of whether every individual attribute has been validated.
The revised framework lays down detailed requirements for collecting and verifying client information, including PAN, passport, OCI card, overseas address, specimen signature, mobile number and email ID.
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Intermediaries will be required to collect the client's PAN and verify it against the Income Tax database without insisting on the production of the original PAN card or a copy of it. The KRA will also verify the PAN and the client's name against the database and mark the relevant attribute as "validated".
For passport verification, intermediaries will have to collect a copy of the client's passport and, wherever applicable, the OCI card. The passport will be verified wherever feasible, with the KRA also undertaking verification where possible.
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For proof of identity and address, intermediaries will have to collect any one of the specified officially valid documents or deemed officially valid documents. The circular clarifies that the overseas address will be treated as the current address for an individual PROI client.
Where original documents are not physically produced for verification, intermediaries can accept equivalent electronic documents available through DigiLocker, electronic documents issued by the relevant authority through a verifiable mechanism, Aadhaar-based e-KYC authentication or copies attested by specified certifying authorities.
These authorities include notaries, authorised officials of overseas branches of scheduled commercial banks registered in India, branches of overseas banks having relationships with Indian banks, court magistrates, judges, and Indian embassies or consulates in the country where the client resides.
The regulator has also provided for video-based in-person verification (VIPV) where physical in-person verification is not feasible. However, the process will have to meet prescribed safeguards, including uninterrupted video recording, live GPS coordinates and time stamps, facial liveness checks and end-to-end encryption.
The client's IP address must originate from India or a FATF-compliant country and match the country specified in the KYC form and supporting documents. The infrastructure must also prevent connections from spoofed IP addresses, VPNs and proxy servers.
An authorised official of the intermediary must be present during the VIPV process, which will be subject to concurrent audit to ensure the integrity and acceptability of the verification outcome.
The circular also allows clients to submit specimen signatures digitally through a cropped image under electronic signature. However, in such cases, the client will have to provide a wet signature before the intermediary during VIPV, which must verify whether it matches the signature submitted earlier.
Intermediaries will also be permitted to collect Indian or international mobile numbers and email IDs from overseas clients. These details will have to be verified through an OTP or another verifiable mechanism, wherever feasible. If the mobile number cannot be verified, all communications with the client must be sent to the verified email address.
The regulator has further eased the requirement for repeat KYC by allowing intermediaries to retrieve existing client records from KRAs and CKYCRR using the client's PAN and CKYC ID, wherever available.
Additional KYC information will be sought only in cases where existing records have changed, are incomplete or do not meet the applicable norms, the validity of identity documents has expired, or the intermediary considers further verification necessary for enhanced due diligence or risk profiling.
Intermediaries can also rely on KYC undertaken by another Sebi-registered intermediary, based on records obtained from the KRA. Similarly, they can rely on KYC undertaken by entities regulated by other financial sector regulators, based on records available through CKYCRR.
However, the ultimate responsibility for KYC will continue to rest with the intermediary, including undertaking enhanced due diligence in accordance with the client's risk profile.
Intermediaries will have to provide completed KYC information to the KRA within three working days of completing the process. They must also ensure that the infrastructure used for KYC complies with Sebi's Cyber Security and Cyber Resilience Framework.
The circular states that all documents submitted by individual PROI clients must be in English. Documents in other languages will have to be translated into English and attested by a certifying authority before submission.
The revised framework will also apply to re-KYC of individual PROI clients residing in FATF-compliant countries.
However, foreign nationals seeking registration as Foreign Portfolio Investors (FPIs) will continue to be governed by the applicable provisions of Sebi's Master Circular for Foreign Portfolio Investors, Designated Depository Participants and Eligible Foreign Investors.
The new provisions will supersede the corresponding requirements under the existing KYC Master Circular, as well as specified earlier instructions on trading account opening and geo-tagging relaxation for NRIs undertaking re-KYC.
KYC processes completed by intermediaries before December 3, 2026, will continue to be governed by the existing provisions.
Disclosure: This article has been written by Kumar Gaurav, who is not a Sebi-registered Research Analyst or an Investment Adviser. Gaurav and their ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective Sebi-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here
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