Good news for Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs), and certain foreign nationals living outside India, looking to invest in the Indian securities market.
Soon, they may find it easier to invest in India’s stock market without having to travel to India just to complete their KYC.
The Securities and Exchange Board of India (SEBI) has proposed a major relaxation in the Know Your Client (KYC) process for individual Persons Resident Outside India (PROIs), allowing them to complete the onboarding process digitally even while they are outside India.
“For years, NRIs, OCIs and foreign nationals wishing to invest in Indian securities have had to either travel to India or rely on courier bound paperwork simply to satisfy a geo tagging requirement during digital KYC,” says CA Kinjal Shah, President, Bombay Chartered Accountants’ Society (BCAS).
The situation could change overnight. The regulator has proposed removing the existing requirement that a non-resident investor must physically be in India during digital KYC. However, the proposed relaxation would apply to clients located in Financial Action Task Force (FATF)-compliant countries.
Nithin Kamath, the founder and CEO of Zerodha, acknowledges the difficulties NRIs encounter during the onboarding process in an X tweet. “Even today, to open an account digitally, an NRI has to be physically in India. If they are abroad, there’s a ton of physical documentation involved and dealing with international courier delays. It has always been the most painful part of the journey.”
“SEBI’s proposals in the new consultation paper fix this longstanding gap,” adds Kamath.
The problem SEBI is trying to fix
Currently, a person living abroad who wants to invest in Indian stocks can do “digital KYC” only if they happen to be physically present in India when they complete the video verification and sign documents electronically.
If they’re outside the country, they’re stuck with the old-school route — printing forms, getting a wet signature, getting documents notarised or attested by an embassy, and then couriering everything to India. SEBI acknowledges this is slow, expensive, and increasingly out of step with how much of the diaspora actually wants to invest.
“Most NRIs already want to invest in India. The problem was getting the account open. You had to be in India for digital KYC, so people did it on a trip home, or they just gave up. If this goes through, that requirement is gone for anyone in a FATF-compliant country.
The portability bit helps too; you are not filling the same forms again at every intermediary. GIFT City is a different thing. That’s IFSCA, and it’s mostly people wanting dollar exposure. This paper is about buying Indian stocks directly,” says Viram Shah, Founder and CEO, Vested Finance.
The timing isn’t incidental. The Union Budget for FY2026-27 opened the door for foreign nationals — not just NRIs and OCIs — to invest directly in listed Indian companies through the Portfolio Investment Scheme, and a June 2026 amendment to foreign exchange rules let foreign nationals buy Indian securities without routing through the Foreign Portfolio Investor mechanism. That created pressure to fix the onboarding bottleneck.
The recent RBI Swap Facility has attracted over $65 billion in FCNR(B) deposits from NRIs in under 60 days, highlighting the significance of NRI investments for the country. The window is open until August 31, ending earlier than the original deadline of September 30.
Kamath shares data from his platform. “We have over 50,000 NRIs investing with us today. A stat that surprised me when we looked at our numbers: nearly 80% of them are active. That’s a ridiculous number. They tend to invest more, take a longer-term view, and seem to be much stickier investors than regular investors.”
What SEBI wants to change
The core proposal: if a client is located in a country compliant with the Financial Action Task Force’s anti-money-laundering standards, the requirement that they be physically present in India during digital KYC would be dropped.
In its place would come a video-based in-person verification with layered safeguards — liveliness detection, GPS location matching against the client’s declared address, protection against spoofed IP addresses or VPN use, and mandatory concurrent audits of the process.
Electronic signatures could make the process easier
SEBI has proposed allowing PROI clients to submit their KYC forms and documents digitally using electronic or digital signatures.
The proposed framework would allow the KYC form to be submitted as:
An original physical form
A scanned copy of a physical form under electronic signature
A digital KYC form under electronic signature
For specimen signatures, investors could provide a cropped image of their signature under electronic signature.
However, there is an important safeguard. During Video In-Person Verification, the investor would still have to provide a wet signature before the intermediary, which would then verify whether it matches the signature submitted earlier.
What about passport and OCI card?
SEBI is not proposing to remove the requirement for these documents. NRIs, OCIs and foreign nationals would still have to provide a copy of their passport, while OCI cardholders would also need to provide their OCI card where applicable. The draft framework proposes that passport information shared through DigiLocker could be verified and the relevant attribute could then be marked as “validated” in the KYC record.
What happens next
This is a consultation paper, not a final rule — SEBI is inviting public comments through September 4, 2026, with a draft circular already attached for reference. If adopted, the changes would kick in 30 days after the final circular is issued and would effectively replace the narrower relaxation SEBI had already given NRIs for re-KYC back in December 2025.
Disclaimer: This article is for informational purposes only and does not constitute professional advice. The proposed KYC changes are not final and may be modified before implementation. Readers should verify the latest regulatory guidelines before making any investment or financial decision. Financial Express is not responsible for any decisions made based on this information.