SEBI plans digital KYC for NRIs and OCIs: no trip to India needed (proposal)

What SEBI has proposed

Today you can’t open a demat, trading or mutual fund account fully online from abroad. Digital KYC needs you in India; otherwise you wet-sign a form and courier certified copies of your passport and address proof. An NRI or OCI in Singapore or Dubai has no online option.

On 14 August 2026, SEBI published a consultation paper (PR No. 46/2026) to change that for individuals resident outside India (“PROIs”: NRIs, OCIs and other foreign individuals). It reviews ten stages of KYC and proposes changes to eight; PAN and passport rules stay as they are. The main ones:

• Physical presence in India for digital KYCTodayRequired→Under the proposalNot required, for clients located in an FATF-compliant country
• In-person verificationTodayA physical visit, or courier certified documents instead→Under the proposalVideo In-Person Verification (VIPV): a live, geo-tagged video call with liveness checks
• Who can certify your documentsTodayAn official at an overseas branch of an Indian bank, a notary, a court magistrate or judge, or the Indian Embassy/Consulate→Under the proposalSame list, plus officials of an overseas bank with an Indian-bank relationship — the list RBI already accepts for bank KYC
• Overseas address proofTodayProof of your overseas address is mandatory: a second document if your passport shows an Indian address or none→Under the proposalYou could self-declare your address if your ID can be checked against an official database
• Email and mobile numberTodayBoth must be verified by OTP or another verifiable method→Under the proposalEmail must be collected and verified; mobile verified only “if feasible”

The draft ties this to where you are, not your passport: it covers clients “located in” an FATF-compliant country and keeps today’s process for those “residing in” a non-compliant one, and the video call’s IP address must come from India or such a country and match the country in your KYC form and ID. One line of the paper says clients “from” such countries, so if you live in one country and hold another’s passport, check the final circular’s wording. There’s no fixed country list either: FATF’s own lists change over time.

Who it would cover, and who it wouldn’t

It would apply to an individual NRI, OCI or foreign national doing KYC for a demat, trading or mutual fund account while located in a country SEBI treats as FATF-compliant. As an NRI or OCI you’d still invest through an NRE or NRO account, and SEBI’s paper notes RBI’s bank KYC rules still expect you to be in India for digital bank on-boarding, so the change helps most if you already have that account. This proposal only touches how you’re identity-verified for the demat, trading or fund account.

It wouldn’t cover a client living in a non-FATF-compliant country, who keeps today’s process; Foreign Portfolio Investors, who stay under SEBI’s separate FPI rules; or companies, trusts and other non-individual investors. And some brokers decline NRIs living in the US or Canada: that’s broker practice, not a SEBI or RBI rule, and this proposal doesn’t change it.

Worked example

Nikhil lives in Singapore and wants to open a demat and mutual fund account. Today he wet-signs a paper KYC form and couriers copies of his passport and address proof, certified by an accepted official such as an overseas branch of an Indian bank, a notary or the Indian High Commission.

If SEBI finalises the proposal and Singapore counts as FATF-compliant at the time, the same account-opening would instead look like this:

1. He fills the KYC form onlineHe signs it with an electronic signature recognised under India’s IT Act and uploads a cropped image of his specimen signature, so nothing is couriered. Aadhaar e-sign needs an Indian mobile number, and SEBI notes no foreign signature provider is recognised in India yet, so this step may be the hard part.
2. He does a Video In-Person Verification callWith the intermediary’s authorised official: liveness checks, live geo-tagging, an IP address (no VPN) from a country matching the one on his KYC form and ID, and a wet signature on camera if he uploaded only a specimen.
3. He submits his documents digitallyA copy certified by an official on the widened list (today’s, plus branches of overseas banks that have a relationship with an Indian bank), an e-document from the issuing authority or Digilocker, or Aadhaar e-KYC if he has it.
4. His KYC record becomes portableKRAs would treat every individual PROI record as portable, tagging each verified detail “validated”. Another SEBI intermediary could rely on it, but may still ask for more under its own risk checks.

Either way, the KYC route doesn’t change how his funds are taxed. If Nikhil were a US tax resident, his Indian mutual funds would still be PFICs, a separate question.

What to do now

Nothing here is in force yet. Opening an account soon? Use today’s process. Then watch for a final circular: comments closed 4 September 2026, and as of 28 September 2026 none has been issued; the decisions from SEBI’s 24 September 2026 Board meeting don’t include it. We’ll update this post when it is.