Sebi proposes easier digital KYC for Indians living abroad | Stock Market News
The Securities and Exchange Board of India (Sebi) is seeking to make it easier for overseas investors to open securities accounts in India, proposing to remove the physical presence and documentation hurdles that have long complicated the process.
In a consultation paper issued Friday, the market regulator proposed allowing non-resident Indians (NRIs), overseas citizens of India (OCIs) and foreign nationals in Financial Action Task Force (FATF)-compliant countries to complete securities-market KYC (know-your-customer) digitally from abroad.
Currently, digital onboarding of non-residents requires clients to be physically present in India, leaving those overseas dependent on physical processes.
Under the proposed framework, clients could submit KYC forms through an app, website or other digital mode, including electronically signed scanned forms and digital KYC forms. Sebi has also proposed accepting a cropped image of a client’s specimen signature, with the investor required to provide a wet signature during video in-person verification, or VIPV.
The regulator also wants to ease document verification. Where original documents are not physically produced, intermediaries could rely on DigiLocker documents, electronically issued documents that can be verified with the issuing authority, Aadhaar-based authentication or documents certified by specified authorities. Sebi has proposed expanding the list of certifying authorities to include authorised officials of overseas banks that have relationships with Indian banks.
Another proposed change targets mobile-number verification, a recurring hurdle for overseas investors. Intermediaries would continue to collect mobile numbers and email IDs, but mobile verification would be required only where feasible.
The market regulator has invited public comments on the proposals until 4 September.
The biggest safeguard accompanying the proposed relaxation would be VIPV. For clients in FATF-compliant countries, Sebi would remove the requirement to be physically present in India, while requiring intermediaries to put in place controls including live GPS capture, liveness checks, facial matching, protection against spoofed IP addresses, end-to-end encryption and concurrent audits.
Sebi is also proposing to make KYC records for persons residing outside India portable even when the entire record has not been validated. Instead, individual KYC attributes would be tagged based on whether they had been verified against official or source databases. This would allow another intermediary to reuse the information already available while conducting additional checks where required.
Apoorva is a Mumbai-based journalist at Mint who covers the Securities and Exchange Board of India (SEBI), tracking the pulse of India’s capital markets, regulatory developments and the people who operate within them. She holds a postgraduate diploma in business and financial journalism from the Asian College of Journalism, where she developed a strong foundation in markets, companies, and economic policy. She began her journalism journey with an internship at Bloomberg, where she worked across beats such as real estate, infrastructure, capital markets, and deals, which helped her understanding of business and finance.<br><br>She is guided by the belief that everything in this world can be explained in simple and fewer words, and that idea shapes how she approaches her writing. She aims to cut through complexity and present nuanced regulatory and financial developments in a way that is both accessible and meaningful to readers.<br><br>When she is not tracking market chatter, Apoorva can usually be found deep into a fiction novel or out on a long run. She is also a trained classical dancer in Bharatanatyam, Mohiniyattam, and Kathakali.
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