SEBI eases NRI KYC rules: Will a fully digital route boost investments in India?
SEBI's proposed digital KYC and onboarding process aims to ease investment for retail NRIs by removing the requirement for physical presence in India.
“Digital KYC and onboarding will reduce friction for retail NRI investors who earlier shunned India investing due to logistics,” Viram Shah, CEO and Founder of Vested Finance, said.
Shah welcomed SEBI's move, saying the proposal should open the door for retail investor NRIs, who can invest in lower ticket sizes as small as $5,000.
Earlier this month, SEBI released a consultation paper, "Review of Know Your Client Process for Individual Persons Resident Outside India" and proposed the relaxation for individual Persons Resident Outside India, including NRIs, Overseas Citizens of India (OCIs) and foreign nationals living abroad, in countries compliant with the Financial Action Task Force (FATF).
SEBI said the current requirement for digital onboarding poses a hurdle because intermediaries must capture the client's latitude and longitude within India. The proposed relaxation aims to remove this requirement for eligible investors located overseas.
How does the current process work?
At present, an NRI seeking to open an account digitally needs to be physically present in India. For those living abroad, the process involves physical documentation and international courier services, which can add significant delays.
"Indeed, the current practice of geo-tagging at the stage of digital KYC creates some inconvenience for NRIs and other eligible overseas investors, who are usually required to come to India and provide additional documents,” CA Kinjal Shah, President, Bombay Chartered Accountants’ Society (BCAS), said, welcoming SEBI’s proposal to simplify the digital onboarding process for overseas investors.
What changes under the new system?
Now, under the new proposal, eligible overseas investors would be able to complete KYC digitally from their country of residence.
Speaking of its advantages, Kinjal Shah says, “the main one is obvious: efficiency. Paperless processing may simplify the process of KYC documentation and verification. Video-based onboarding and verification across entities would make it easier for investors from FATF compliant jurisdiction."
"Nevertheless, intermediaries will have to preserve a proper audit trail and ensure proper classification of the investors.”
But will it really boost NRI participation?
Digital KYC and onboarding could reduce friction for retail NRI investors who previously shunned investing in India due to logistical and documentation challenges.
However, the recent relative underperformance of Indian markets, coupled with the depreciation of the rupee, could still be a key factor influencing whether NRIs choose to invest in India through a fully digital route.
About the Author
Sanchari Ghosh is an Assistant Editor at Mint with over 12 years of experience in journalism, specialising in personal finance, DLT & DeFi, geopolitics and foreign policy, with a particular emphasis on how these areas intersect. <br> She writes extensively about how money works in everyday life—helping readers navigate personal finance decisions. <br> As AI reshapes investing behaviour, capital is increasingly flowing into decentralized ecosystems, redefining how assets are managed, traded, and valued. She focuses on explaining how money flows within frameworks like Distributed Ledger Technology (DLT), DeFi protocols, and crypto markets—while also exploring what the future of money could look like in a trustless, programmable financial world. <br> She also focuses on immigration-related issues, simplifying complex topics around visas, passports, overseas financial planning, and the many practical challenges Indians face while moving or living abroad. <br> Alongside personal finance, Sanchari has a strong understanding of international politics, contemporary and historical conflicts, and global state decisions. She closely tracks how geopolitical developments influence economies, markets, and individual financial choices, bringing together finance and global affairs in her reporting. <br> She began her career as a desk editor, which gave her a strong foundation in news writing. Over time, her interest naturally shifted toward personal finance. Before joining Mint in 2020, she worked DNA, The Times of India, Outlook Money, BloombergQuint, and ETMoney. At Mint, she got an opportunity to expand her coverage to include immigration and geopolitical developments while continuing to closely follow personal finance trends and market movements.As a journalist, she is committed to accuracy, intellectual rigour, and fairness. <br> She is an English Major and her work took her across cities including Delhi, Mumbai, and Pune. Living independently from an early age gave her firsthand experience in managing life and money on her own. This practical exposure sparked her strong interest in personal finance. <br> Outside the newsroom, Sanchari is a sports enthusiast who regularly plays lawn tennis and squash. In her younger years, she was also a national-level badminton player.
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