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India regulator proposes fully digital KYC for overseas investors
🇴🇲 Oman /Technology

India regulator proposes fully digital KYC for overseas investors

From Times of Oman · () English

Translated from English, summarized and contextualized by DistantNews.

At a glance

News Official statement New plan
  • India's securities market regulator, SEBI, proposes fully digital Know Your Customer (KYC) processes for overseas investors.
  • The move aims to ease investment for Non-Resident Indians, OCIs, and foreign nationals by removing the need for physical presence in India.
  • SEBI also suggests making KYC records portable across intermediaries and allowing reliance on KYC conducted by other financial regulators.

India's market regulator, the Securities and Exchange Board of India (SEBI), is proposing a significant shift to digital Know Your Customer (KYC) processes. This initiative aims to attract more investment from individuals living abroad, including Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs), and other foreign nationals.

To facilitate digital on-boarding process for clients outside India, the requirement of physical location in India during 'digital KYC' may be relaxed for clients from Financial Action Task Force (FATF) compliant countries.

— SEBISEBI's consultation paper explaining the proposed relaxation of physical presence requirements for digital KYC.

The proposed changes would allow these individuals to complete their KYC requirements entirely online, without needing to be physically present in India. This relaxation would apply to those residing in countries compliant with the Financial Action Task Force (FATF) standards. Currently, digital onboarding is restricted to those physically within India, as intermediaries face hurdles with capturing client location data.

SEBI also plans to introduce "One KYC for multiple intermediaries," enabling investors to use a single, validated KYC record across different securities market participants. This would streamline the process, preventing investors from repeating the entire procedure when approaching a new intermediary. While the full validation requirement might be relaxed for portability, information verified against official databases would be flagged and shared, with intermediaries conducting additional risk-based checks.

One KYC for multiple intermediaries.

— SEBISEBI's description of the proposed portability of KYC records.

Further proposals include allowing intermediaries to leverage KYC conducted by entities regulated by other financial authorities, though the ultimate responsibility for KYC would remain with the securities market intermediary. Safeguards for remote video verification, such as liveness checks and location capture, are also being considered. SEBI highlighted that individuals residing outside India represent a "significant and growing pool of investment into India," underscoring the importance of smoother onboarding processes.

significant and growing pool of investment into India

— SEBISEBI's rationale for easing the onboarding process for overseas investors.
DistantNews Editorial

Originally published by Times of Oman in English. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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