SEBI Proposes Easier KYC Rules for NRIs, OCIs Abroad

The Securities and Exchange Board of India (SEBI) has proposed simpler KYC rules for Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs) and foreign nationals investing in Indian securities.

The biggest proposed change is straightforward: eligible overseas investors from Financial Action Task Force (FATF) compliant countries could complete digital KYC while physically outside India. This could remove one of the major hurdles in opening or updating Indian investment accounts from abroad.

Importantly, these are proposals, not final rules yet. SEBI released its consultation paper on August 14, 2026, and has invited public comments until September 4, 2026.

What has SEBI proposed for NRI and OCI KYC?

SEBI’s consultation paper reviews the KYC process for individual “Persons Resident Outside India”, or PROIs. For this proposal, that covers NRIs, OCIs and foreign nationals located outside India.

At present, complete digital onboarding can be difficult because SEBI’s KYC framework requires the investor’s location to be in India during digital KYC. Overseas investors may therefore have to rely on physical documents, certified copies and courier-based processes.

SEBI wants to make this process more digital while retaining identity verification and anti-money laundering safeguards.

Key KYC changes proposed by SEBI

Area	Current challenge	SEBI’s proposal
Physical presence	Digital KYC generally requires the investor to be in India	Allow digital onboarding from FATF-compliant countries
KYC form	Physical forms may need to be couriered	Permit digital submission of KYC forms
Signature	Digital processes can still create signature-related hurdles	Allow electronic signatures or a cropped specimen signature, subject to verification
Address	Overseas address documentation can complicate onboarding	Permit self-declaration in specified cases
Mobile verification	Foreign mobile number verification can be difficult	Mobile verification may be done if feasible, while email would be mandatory
Document verification	Original verification and attestation can require physical steps	Expand digital document verification options
KYC portability	Unvalidated records may not be easily portable	Make PROI KYC records portable, with individual attributes tagged based on validation
Video verification	Location restrictions prevent end-to-end overseas onboarding	Permit VIPV from eligible foreign jurisdictions with safeguards

These proposals are part of SEBI’s broader effort to enable seamless digital onboarding for overseas investors.

Can NRIs complete KYC without coming to India?

If SEBI’s proposal becomes final in its current form, NRIs and other eligible PROI investors in FATF-compliant countries could complete digital KYC without being physically present in India.

This is arguably the most significant proposed change.

Currently, an intermediary conducting digital KYC captures the investor’s live photograph and location information, including latitude and longitude. The existing framework requires that location to be in India. SEBI proposes removing this India-location requirement for PROIs in FATF-compliant countries.

The relaxation would not mean weaker verification. SEBI has proposed safeguards including:

• A liveliness check during video verification
• Video In-Person Verification (VIPV) in the presence of an authorised representative
• Live capture of latitude and longitude
• Matching the investor’s location with the country stated in the address proof
• Measures to prevent spoofed IP connections
• Concurrent audits
• Compliance with SEBI’s cybersecurity and cyber-resilience requirements

For investors from FATF non-compliant countries, the existing KYC process is proposed to continue.

How could document submission become easier?

SEBI has proposed allowing PROI investors to submit the KYC form and Officially Valid Documents (OVDs) digitally using an electronic or digital signature, including Aadhaar e-Sign where available.

Under the draft framework, a KYC form could be submitted as:

1. An original physical form
2. A scanned physical form under an electronic signature
3. A digital KYC form under an electronic signature

This could reduce dependence on international couriers and physical paperwork.

The problem is particularly relevant for investors living overseas. SEBI itself notes that sending signed KYC documents by courier can be time-consuming and costly.

What changes are proposed for signatures?

SEBI also wants to simplify specimen signature requirements.

An overseas investor could potentially submit a cropped image of their specimen signature under an electronic signature. During Video In-Person Verification, the investor would provide a wet signature in front of the intermediary, which would then be matched against the submitted specimen.

Electronic or digital signatures could also be used for submitting KYC forms and OVDs.

SEBI’s consultation paper highlights a practical limitation with Aadhaar e-Sign. It generally requires access to an Indian mobile number for OTP authentication. KRA data cited by SEBI shows that only about 1.45% of NRI KYC records between June 1, 2025 and June 30, 2026 were based on Aadhaar e-Sign.

Will a foreign mobile number still need to be verified?

SEBI has recognised that verifying foreign mobile numbers can be difficult and expensive for intermediaries.

The proposal would require intermediaries to collect and verify an investor’s email address. The submitted mobile number would be verified if feasible.

This could be useful for NRIs and foreign nationals who do not maintain an active Indian mobile number.

What changes are proposed for overseas address proof?

For a PROI investor, the current address used for KYC would generally be the overseas address.

SEBI proposes allowing investors to self-declare their current address in certain cases. This would apply when the investor has submitted an OVD that can be verified through an official or source database but the investor’s current address differs from the address shown on that document.

During digital onboarding, intermediaries would capture the investor’s latitude and longitude and match the location with the country specified in the address provided.

Will passport and PAN requirements change?

Not everything is being relaxed.

SEBI has proposed no review of the PAN requirement. PAN remains mandatory for securities-market participants, subject to existing exemptions. Since PAN details can be checked against the Income Tax database, the investor does not need to be asked for the original PAN or a copy solely for that verification.

NRIs, OCIs and foreign nationals would also continue to provide a passport copy. OCI investors would provide their OCI card where applicable.

How could KYC portability improve?

Another important proposal concerns KYC portability.

Currently, KYC records that have been verified against official or source databases can be tagged as “validated”. A validated record is portable, meaning an investor generally does not need to repeat the entire KYC process when approaching another intermediary.

SEBI proposes treating PROI KYC records as portable even where every attribute has not been validated. Each KYC attribute that has been source-verified would instead be individually tagged as validated.

A new intermediary could then perform additional checks based on its assessment of the investor’s risk.

SEBI also proposes allowing intermediaries to rely on KYC completed by another SEBI-registered intermediary or an entity regulated by another financial-sector regulator, based on records obtained through the Central KYC Records Registry (CKYCRR). The intermediary would still retain ultimate responsibility for its client’s KYC.

Why is SEBI easing KYC for overseas investors?

The proposal fits into a broader effort to make Indian capital markets easier to access for overseas individuals.

SEBI noted that it had received representations seeking relaxation of the India-presence requirement, along with concerns about original-document verification, signatures and KYC portability.

There has already been movement in this direction. In December 2025, SEBI relaxed the India geo-tagging requirement for NRIs undertaking re-KYC, allowing certain KYC modifications to be completed from outside India.

The latest proposal goes considerably further by addressing first-time digital onboarding for a broader group of overseas investors.

What does the proposal mean for NRIs and OCIs?

For an NRI or OCI who wants to invest in Indian securities, the practical impact could be substantial.

Instead of planning KYC around a visit to India or dealing with certified physical documents and international couriers, more of the process could potentially happen online from the investor’s country of residence.

The changes could particularly benefit investors who:

• Live and work abroad permanently
• Do not have easy access to an Indian mobile number
• Need to open an Indian securities account from overseas
• Need to update KYC information while abroad
• Want to use an existing KYC record with another intermediary

The exact experience will depend on the final SEBI framework and how brokers, depositories, KRAs and other intermediaries implement it.

When will the new NRI KYC rules take effect?

There is no final effective date yet.

SEBI’s August 14 document is a consultation paper accompanied by a draft circular. The regulator has invited comments on issues such as overseas digital onboarding, mobile verification, electronic signatures, address self-declaration, KYC portability and additional safeguards for video verification.

The deadline for public comments is September 4, 2026. SEBI may modify the framework after reviewing stakeholder feedback before issuing final requirements.

FAQs

Key takeaways

• SEBI has proposed easier digital KYC for NRIs, OCIs and foreign nationals living abroad.
• Eligible investors in FATF-compliant countries may no longer need to be physically present in India for digital KYC.
• Digital KYC forms, electronic signatures and easier document verification are proposed.
• Email verification could become mandatory, while mobile verification may be required only where feasible.
• SEBI proposes greater portability of overseas investors’ KYC records.
• PAN and passport requirements broadly remain in place.
• The changes are not final yet, and public comments are open until September 4, 2026.