SEBI proposes fully digital KYC for NRIs, OCIs and foreign nationals located outside India in FATF-compliant countries; comment window closed on 4 September 2026
A SEBI consultation paper issued on 14 August 2026 proposes to let intermediaries on-board individual persons resident outside India digitally without insisting on physical presence in India, if the client is located in a FATF-compliant country. KYC records of such clients would be treated as portable, and video in-person verification would be subject to concurrent audit. Comments were due by 4 September 2026; the window has closed.
Key facts
- In force
- Proposal only; comments were due by 4 September 2026 (window closed)
- Who it affects
- NRIs, OCIs and foreign nationals investing in Indian securities; stock brokers, depository participants, mutual funds and other SEBI-registered intermediaries; KRAs
- What it is
- Comments invited
- Section
- SEBI
- Published
- 14 August 2026
In 30 seconds
- The paper covers individual persons resident outside India (PROI): NRIs, OCIs and foreign nationals located outside India.
- At present, digital on-boarding of such a client is feasible only when the client is located in India at the time of on-boarding.
- Proposed: relax the requirement of physical location in India for clients from FATF-compliant countries; the existing process continues for FATF non-compliant countries.
- Proposed: KYC form and documents accepted digitally under electronic signature; cropped specimen signature, with wet signature verified during video in-person verification (VIPV).
- Proposed: KRAs to treat all KYC records of individual PROIs as portable, with each attribute tagged “validated” if verified with an official or source database.
- No change is proposed for PAN and passport requirements.
हिंदी में सार
SEBI ने 14 अगस्त 2026 के कंसल्टेशन पेपर में प्रस्ताव रखा है कि FATF-अनुपालक देशों में रह रहे NRI, OCI और विदेशी नागरिक भारत आए बिना पूरी तरह डिजिटल KYC कर सकें। फ़िलहाल डिजिटल KYC के लिए ग्राहक का भारत में होना ज़रूरी है। वीडियो सत्यापन पर सुरक्षा उपाय और concurrent audit तथा KYC रिकॉर्ड की portability भी प्रस्तावित है। यह सिर्फ़ प्रस्ताव है; टिप्पणी की आख़िरी तारीख़ 4 सितंबर 2026 थी, जो निकल चुकी है।
Before and now
Digital on-boarding of an individual PROI client is feasible only when the client is located in India at the time of on-boarding.
Proposed (not decided): digital on-boarding without physical presence in India for clients located in FATF-compliant countries, with VIPV safeguards.
What the paper is about
SEBI issued a consultation paper on 14 August 2026 reviewing the Know Your Client (KYC) process for individual Persons Resident Outside India (PROI) — NRIs, Overseas Citizens of India (OCIs) and foreign nationals located outside India. These are proposals for public comment, not decisions. Comments were to be submitted latest by 4 September 2026; that window has closed.
The problem
Under SEBI’s KYC Master Circular dated 12 October 2023, the intermediary’s app must ensure that the client is physically in India during digital KYC. So a PROI client who is abroad cannot submit the KYC form digitally, use DigiLocker documents or complete in-person verification by video. The alternatives are a visit, or couriering a signed form with copies of documents certified by a notary, an overseas branch of an Indian scheduled commercial bank, a court magistrate, a judge or the Indian Embassy/Consulate — a process the paper calls time-consuming and costly.
The paper notes that SEBI had, by a circular dated 10 December 2025, already relaxed the geo-tagging requirement for NRIs undertaking re-KYC.
What is proposed
| Stage | Proposal |
|---|---|
| KYC form | Client may fill the form physically or digitally (app or website), sign and share it digitally with the intermediary, without being present in India |
| Signature | Cropped image of the specimen signature with digital submission; the client does a wet signature before the intermediary during VIPV. Form and documents may be submitted under electronic or digital signature, including Aadhaar e-sign |
| PAN and passport | No review proposed |
| Address | Intermediary to capture the client’s latitude and longitude and match it with the country in the address given. Self-declaration of current address allowed if the client has submitted a document verifiable with an official or source database |
| Mobile and email | Intermediary to collect and verify the email id; mobile number to be verified if feasible |
| Original seen and verified | Proof of possession of Aadhaar, a digitally signed document from the issuing authority or a document through DigiLocker. Attesting officials to include authorised officials of branches of overseas banks with whom Indian banks have relationships |
| In-person verification | IPV continues to be mandatory. Location-in-India requirement relaxed for clients from FATF-compliant countries, with safeguards: liveliness check, authorised representative of the intermediary, live location capture, blocking of spoofed IP addresses and concurrent audit |
| Portability | The “validated” requirement relaxed for portability; attributes verified with source databases to be flagged and shared with other intermediaries |
| Third-party KYC | Intermediary to collect the CKYC ID, if available, and may rely on KYC done by an entity regulated by another financial sector regulator, as per the CKYCRR record obtained through the KRA. Ultimate responsibility stays with the intermediary |
In the draft circular
- The intermediary would give KYC information to the KRA within 3 working days of completing KYC.
- The same process would apply to re-KYC of a client in a FATF-compliant country.
- The circular would take effect thirty days from its date of issue; KYC done before that would continue under the existing provisions.
- An individual foreign national seeking registration as an FPI stays under the FPI Master Circular dated 30 May 2024.
What to note
Until SEBI issues a final circular, the existing rule stands: a client outside India cannot complete digital KYC from abroad. The paper also notes that RBI’s Master Directions on KYC require the client to be present in India during on-boarding, so the relaxation would help PROI clients who already have a bank account.
Questions and answers
Can an NRI now complete KYC digitally from abroad?
Not yet. SEBI has only proposed it in a consultation paper issued on 14 August 2026. At present, digital on-boarding of an individual person resident outside India is feasible only when the client is located in India at the time of on-boarding.
Who would be covered by the proposal?
Individual persons resident outside India — NRIs, OCIs and foreign nationals — located in a FATF-compliant country. For clients in FATF non-compliant countries the existing KYC process would continue.
Is any change proposed to PAN or passport requirements?
No. The paper says no review is proposed. PAN remains mandatory, subject to the exemptions in the KYC Master Circular, and NRIs, OCIs and foreign nationals must provide a copy of their passport; an OCI also provides a copy of the OCI card.
What safeguards are proposed for video verification?
A liveliness check, verification in the presence of an authorised representative of the intermediary, live capture of the client’s latitude and longitude to match the country in the proof of address, prevention of connections from spoofed IP addresses, and concurrent audit.
Is the comment window still open?
No. Comments were to be submitted latest by 4 September 2026.
Published 14 August 2026. Updated 7 October 2026. This report is for general information and is not professional advice. Read the source document before acting on it.