The Securities and Exchange Board of India (SEBI) has proposed allowing individual persons resident outside India (PROIs), including Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs) and foreign nationals, to complete their securities-market KYC digitally without being physically present in India. The proposed relaxation would apply to individuals located in countries compliant with the Financial Action Task Force (FATF).
The proposal is aimed at making it easier for overseas investors to access India’s securities market while reducing the paperwork and logistical difficulties associated with onboarding from abroad. SEBI is also proposing portable KYC records, allowing eligible investors to reuse verified KYC information when dealing with multiple market intermediaries. The consultation paper was released on August 14, 2026, with public comments invited until September 4.
Why SEBI Wants to Change the KYC Process
Under the existing framework, digital onboarding requires the client to be physically present in India during the process. SEBI said this creates difficulties for PROI clients who are based overseas and want to complete onboarding digitally.
The regulator’s proposed changes are designed to remove this geographical barrier for eligible overseas investors.
SEBI noted that PROIs represent a growing pool of investment into India and play an important role in the country’s securities market. Easier onboarding could help channel more overseas savings into Indian capital markets.
Who Could Benefit?
| Investor Category | Proposed Digital KYC |
|---|---|
| NRIs | Yes, if located in FATF-compliant country |
| OCIs | Yes, if located in FATF-compliant country |
| Foreign nationals | Yes, if located in FATF-compliant country |
| Other individual PROIs | Potentially, subject to proposed framework |
| Investors in non-FATF-compliant jurisdictions | Not covered by proposed relaxation |
The proposal is specifically focused on individual persons resident outside India rather than creating a blanket digital-KYC exemption for every overseas investor.
What Is Changing for NRIs?
Under the proposed framework, an NRI living overseas would not necessarily have to travel to India simply to complete securities-market KYC.
For example, an NRI residing in Singapore, the UK or another FATF-compliant jurisdiction could potentially complete the required verification remotely through approved digital processes.
NRI Onboarding
NRI living abroad
↓
Digital submission of KYC records
↓
Video-based verification
↓
Identity and location checks
↓
KYC validation
↓
Account onboarding
↓
Investment in Indian securities
The proposal could make investing in Indian stocks and other securities considerably more convenient for the Indian diaspora.
OCIs and Foreign Nationals Are Also Covered
The proposal goes beyond NRIs.
Overseas Citizens of India and foreign nationals residing outside India could also benefit if they are located in FATF-compliant jurisdictions and meet the applicable requirements.
This is important because SEBI is attempting to create a broader framework for individual overseas investors rather than focusing only on the Indian diaspora.
Eligible Overseas Investor Pool
NRIs
OCIs
Foreign nationals
Other eligible individual PROIs
↓
Digital KYC
↓
Potentially easier access to Indian securities markets
FATF Compliance Will Be Important
The proposed relaxation is not intended to apply to investors located in every country.
SEBI has proposed restricting the digital onboarding facility to individuals located in FATF-compliant countries.
The FATF, or Financial Action Task Force, is an international body that establishes standards for combating money laundering and terrorist financing.
Proposed Eligibility Filter
Investor outside India
↓
Country checked
↓
FATF-compliant?
↓
YES → Digital KYC potentially permitted
NO → Proposed relaxation does not apply
This condition is intended to provide an additional layer of regulatory protection while making onboarding easier.
Video Verification Will Remain Important
SEBI has proposed safeguards around video in-person verification (VIPV).
The objective is to make remote onboarding convenient without weakening identity verification.
Intermediaries would need to implement measures such as liveness checks and other controls designed to establish that the person completing the process is genuine.
Proposed Digital Verification
Investor
↓
Live video interaction
↓
Liveness check
↓
Identity verification
↓
Document verification
↓
Location verification
↓
KYC approval
The framework is therefore designed to replace physical presence with stronger digital verification rather than simply removing verification requirements.
Location Verification Could Be Required
One of the proposed safeguards involves capturing the investor’s latitude and longitude during the onboarding process.
The captured location would need to correspond with the country specified in the investor’s proof of address.
This could help prevent someone from falsely claiming to be located in an eligible jurisdiction.
Location Check
Investor’s declared country
Proof of address
Live latitude/longitude
↓
Cross-check
↓
Consistent information
↓
KYC proceeds
This is intended to reduce the risk of location-related fraud during remote onboarding.
SEBI Wants to Block Spoofed IP Addresses
Another proposed safeguard is preventing connections originating from spoofed IP addresses.
IP spoofing can make a connection appear to originate from a different location than its actual source.
SEBI’s proposed framework therefore seeks to combine several technological checks rather than relying on a single verification mechanism.
Digital Security Layer
Liveness detection
Location capture
IP verification
KYC document checks
Authorised representative
↓
Stronger remote verification
The regulator has also proposed cybersecurity compliance and concurrent audit requirements as part of the safeguards.
KYC Records Could Become Portable
Another major part of the proposal is making KYC records portable for individual PROIs.
At present, investors can face repeated KYC requirements when dealing with different financial intermediaries.
SEBI wants verified KYC information to be reusable across intermediaries.
Current Model
Investor
↓
Broker
↓
KYC
↓
Another intermediary
↓
KYC again
↓
Another intermediary
↓
KYC again
Proposed Model
Investor
↓
KYC once
↓
Verified record
↓
Intermediary A
Intermediary B
Intermediary C
↓
Reusable KYC
This could significantly reduce duplication for overseas investors.
KYC Registration Agencies Could Play a Bigger Role
SEBI has proposed that KYC Registration Agencies (KRAs) treat relevant PROI KYC records as portable.
Individual attributes that have been verified against official or source databases could be tagged as “validated.”
This would allow intermediaries to rely more heavily on existing verified information instead of restarting the entire process.
Portable KYC
KYC submitted
↓
Information verified
↓
Validated attributes stored
↓
KRA record
↓
New intermediary accesses record
↓
Less repeated documentation
The approach could make onboarding faster for investors who maintain multiple investment relationships.
Investors Could Use Self-Declared Addresses in Certain Cases
SEBI has also proposed allowing PROI clients to provide a self-declaration of their current address if the officially valid document they submit can be verified against an official or source database.
This could simplify address verification for overseas investors whose documentation may not always fit traditional verification processes.
Address Verification
Official document
↓
Verified against source database
↓
Document authenticated
↓
Investor may self-declare current address
↓
KYC record updated
This would potentially reduce some of the documentation burden without removing verification altogether.
KYC Could Be Reused Across Financial Intermediaries
SEBI has proposed allowing an intermediary to rely on KYC conducted by another SEBI-registered intermediary or an entity regulated by another financial-sector regulator.
This could further reduce duplication.
Proposed KYC Ecosystem
SEBI-registered intermediary
Other regulated financial entity
↓
Verified KYC
↓
KYC system
↓
Another SEBI-regulated intermediary
↓
Reuse of verified information
The approach could make the financial system more interconnected from a KYC perspective.
Overseas Banks Could Get a Role in Document Certification
SEBI has proposed expanding the list of officials who can certify documents.
This could include officials of overseas banks that have relationships with Indian banks.
This change could provide overseas investors with more convenient options for document certification.
Certification Network
Investor abroad
↓
Overseas bank
↓
Authorised official
↓
Document certification
↓
Indian intermediary
↓
KYC processing
The change could be particularly useful for investors who cannot easily access Indian financial institutions while living abroad.
Email IDs Could Become Mandatory
Another proposal seeks to require the collection of email IDs from PROI clients.
The objective is to facilitate communication between overseas investors and market intermediaries.
This could become increasingly important as more parts of the investment process move online.
Digital Communication
Investor
↓
Email ID
↓
Broker / intermediary
↓
KYC updates
Transaction communication
Regulatory communication
↓
Fully digital relationship
The measure would complement the broader shift toward remote onboarding.
The Proposal Follows a June Policy Change
SEBI’s proposal comes shortly after a June amendment by the Finance Ministry to the Foreign Exchange Management (Non-debt Instruments) Rules, 2019.
That amendment permits foreign nationals to invest in Indian securities without using the foreign portfolio investment route, with the objective of facilitating foreign investment.
The KYC proposal can therefore be seen as part of a wider effort to make it easier for eligible individuals outside India to participate in Indian financial markets.
Policy Sequence
June 2026
↓
FEMA-related framework amended
↓
Foreign nationals get greater investment flexibility
↓
August 2026
↓
SEBI proposes digital KYC
↓
Potentially easier onboarding
↓
Greater overseas participation
The two measures could complement each other by addressing both investment eligibility and onboarding friction.
Why This Matters for India’s Capital Markets
India has become an increasingly attractive investment destination for overseas investors.
However, regulatory procedures can create friction for individuals who want to invest directly.
If KYC becomes easier, the process could become more competitive with other major financial markets.
Overseas Investment Funnel
Interest in India
↓
Investment decision
↓
KYC
↓
Account opening
↓
Money transfer
↓
Investment
↓
Returns
SEBI’s proposal focuses on reducing friction at the KYC and account-opening stages.
NRIs Could Find Investing Back Home Easier
For the Indian diaspora, the proposal could make investing in Indian capital markets more convenient.
Instead of arranging a physical visit to India for onboarding, eligible investors could potentially complete the process remotely.
This could be especially useful for investors who live thousands of kilometres away from India.
NRI Investor Journey
Living abroad
↓
Interested in Indian markets
↓
Digital KYC
↓
Remote verification
↓
Account opened
↓
Indian investments
The proposal could therefore make “investing back home” easier for NRIs and OCIs.
The Move Could Channel More Overseas Savings Into India
SEBI believes smoother onboarding could help channel overseas savings into Indian capital markets.
The potential impact extends beyond convenience.
More efficient onboarding could increase the number of individuals who actually complete the transition from being interested in investing in India to becoming active investors.
Potential Impact
Lower onboarding friction
↓
More completed applications
↓
More overseas investors
↓
Greater participation
↓
Potentially higher capital flows
↓
Deeper Indian capital markets
The actual impact will depend on how widely the framework is adopted and how many investors are currently deterred by KYC requirements.
Digital KYC Does Not Mean Lower Regulatory Standards
The proposal is designed to change how verification is performed, not to eliminate KYC.
Eligible investors would still need to provide required documents and undergo verification.
The difference is that more of the process could happen remotely.
Physical vs Digital
Physical model
↓
Travel / physical presence
↓
Document verification
↓
KYC
Digital model
↓
Online document submission
↓
Video verification
↓
Liveness check
↓
Location check
↓
KYC
The second model aims to deliver the same regulatory objective through technology.
Cybersecurity Will Become More Important
Moving more KYC processes online increases the importance of cybersecurity.
SEBI has therefore proposed safeguards involving spoofed IP prevention, concurrent audits and cybersecurity compliance.
This will require intermediaries to invest in secure technology infrastructure.
Digital KYC Security
Secure platform
Identity verification
Liveness
Location checks
IP protection
Cybersecurity controls
↓
Secure remote onboarding
The challenge will be ensuring that convenience does not create new vulnerabilities.
Fraud Prevention Will Be a Key Test
Remote verification can create risks such as identity theft, deepfake-based impersonation and fraudulent documents.
Liveness detection and video verification can help, but intermediaries will need robust systems to detect sophisticated attacks.
Fraud Risk
Fake identity
↓
Digital verification
↓
Liveness test
Document validation
Location verification
IP checks
↓
Fraud detection
The effectiveness of these controls will determine how safely the proposed system can scale.
The Proposal Is Not Yet Final
The proposed changes are currently part of a consultation process.
SEBI released the consultation paper on August 14 and has invited public comments until September 4, 2026.
This means investors should not treat the proposed rules as immediately applicable requirements.
Regulatory Process
Consultation paper
↓
Public comments
↓
SEBI review
↓
Possible modifications
↓
Final regulations
↓
Implementation
The final framework could therefore differ from the current proposal.
Key Numbers and Dates at a Glance
| Item | Proposed / Current Detail |
|---|---|
| Regulator | SEBI |
| Proposal date | August 14, 2026 |
| Public comment deadline | September 4, 2026 |
| Eligible investor categories | NRIs, OCIs, foreign nationals and other individual PROIs |
| Geographic condition | FATF-compliant countries |
| Physical presence in India | Proposed to be removed for eligible investors |
| KYC mode | Digital |
| Video verification | Proposed |
| Liveness check | Proposed |
| Latitude/longitude capture | Proposed |
| Spoofed IP prevention | Proposed |
| KYC portability | Proposed |
| Overseas bank officials for certification | Proposed |
| Email collection | Proposed |
What Investors Should Watch
Overseas investors should watch the final version of SEBI’s framework rather than assuming that the proposed changes are already in effect.
The key areas to monitor include:
- Final eligibility criteria
- List or definition of eligible jurisdictions
- Final video-verification requirements
- KYC portability rules
- Document-certification requirements
- Cybersecurity safeguards
- Implementation timeline
- Treatment of existing overseas investors
What Could Change Next
Public comments
↓
SEBI review
↓
Final framework
↓
Intermediary technology upgrades
↓
Digital onboarding
↓
Portable KYC
The implementation process will determine how quickly investors see practical benefits.
What It Means for Brokers and Financial Intermediaries
The proposal could reduce manual paperwork but increase technology and compliance requirements.
Intermediaries will need systems capable of handling remote verification securely.
Intermediary Investment
Digital KYC platform
Video verification
Liveness detection
Location technology
IP security
KYC integration
Cybersecurity
↓
Remote investor onboarding
This means the proposal could simultaneously reduce paperwork while increasing technology investment.
The Bigger Opportunity for India’s Financial Sector
The move is part of a broader digital transformation of India’s financial markets.
Banking, payments, mutual funds, brokerage and investment services have increasingly moved online.
SEBI’s proposal would extend that transformation to overseas investor onboarding.
Financial Market Digitisation
Digital banking
Digital payments
Online investing
Remote KYC
↓
Digitally accessible financial market
For overseas investors, this could remove one of the remaining physical barriers to participating in India’s capital markets.
Looking Ahead
SEBI’s proposal to allow NRIs, OCIs and eligible foreign nationals in FATF-compliant countries to complete securities-market KYC digitally could remove a significant hurdle for overseas investors seeking access to Indian capital markets. The proposal would eliminate the need for eligible investors to be physically present in India during digital onboarding and would introduce safeguards such as liveness checks, video verification, location capture and spoofed-IP prevention. SEBI also wants KYC records for individual PROIs to become portable, potentially allowing investors to reuse verified information across multiple securities-market intermediaries.
The proposed changes could make investing in India more convenient for the global Indian diaspora while potentially helping channel more overseas savings into domestic capital markets. However, the regulator is attempting to balance convenience with strong safeguards against identity fraud, location manipulation and cybersecurity threats. The consultation paper was released on August 14, with September 4 set as the deadline for public comments, so the framework is not yet final. If adopted, the changes could mark another step toward a fully digital Indian securities market in which investors can complete onboarding from abroad without sacrificing core KYC and compliance protections.
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