India's SEBI to simplify KYC for NRIs: Remote access, faster onboarding soon

Dubai: The Securities and Exchange Board of India (SEBI) is moving to make it easier and safer for Non-Resident Indians (NRIs) to invest in Indian markets without having to travel back home for paperwork.

SEBI Chairperson Tuhin Kanta Pandey said the regulator is working to roll out secure, remote KYC verification for NRIs — a step that could finally remove one of the biggest pain points for overseas investors.

“We are yet to establish an easy and secure KYC access for NRIs to facilitate their participation in the securities market. This will be an urgent goal for us,” Pandey said at the BFF Capital Market Confluence 2025 in Mumbai.

Pandey confirmed that SEBI is in advanced discussions with the UIDAI (which manages Aadhaar) and the Reserve Bank of India (RBI) to enable remote, paperless KYC.
The system is currently in the testing phase and, once operational, will allow NRIs to verify their identity digitally — without having to visit India.

“It will be a major development once operational,” he said, speaking at an event hosted by the BSE Brokers Forum.

This move comes as SEBI focuses on widening participation among global Indian investors while maintaining high standards of security and compliance.

Despite India’s market boom, participation by NRIs remains limited compared with their potential. Easier access to KYC (Know Your Customer) verification — a mandatory step before investing — could open doors for millions of Indians abroad who want to invest directly in equities, mutual funds, and other regulated products.

Pandey acknowledged that while KYC norms for domestic investors have been simplified, the process remains cumbersome for NRIs due to physical verification requirements and multiple documentation checks.

Pandey said SEBI’s goal is not just faster onboarding but broader, informed market participation. A recent nationwide survey revealed that while 63% of Indian households are aware of securities products, only 9.5% actively invest. In urban areas, that figure rises to 15%, while rural participation stands at 6%.

He pointed out that only 36% of investors have a strong understanding of market products — showing the need for continued investor education and awareness.

Pandey underlined SEBI’s focus on technology and resilience. On any given day, India’s stock exchanges handle more than 1,600 crore messages, peaking at 2,900 crore on busy days — all backed by investor trust.

To protect that trust, SEBI has issued a comprehensive cybersecurity and cyber-resilience framework and is now stress-testing market institutions with live recovery drills.

The regulator is also examining safety nets for outages affecting depository participants (DPs) — similar to those in place for stockbrokers — to ensure continuity.

“An attack on a single institution can destabilise the ecosystem. Our systems must remain secure and resilient,” Pandey said.

SEBI is also adopting data-driven surveillance, using AI and analytics to identify “pump-and-dump” patterns and detect fraud before it spreads.

Pandey said SEBI has revamped its data warehouse to enable predictive oversight, marking a shift from traditional reactive supervision.

For global investors, SEBI plans to further simplify the Foreign Portfolio Investor (FPI) registration process. Pandey described it as a key entry point for global funds and institutions.

“FPI registration is a window to the world. If the window itself has cobwebs, it won’t shine in its glory,” he said, adding that the goal is to remove operational hurdles without compromising on risk management.

At the Global Fintech Fest 2025 earlier this month, Pandey outlined how SEBI’s digital transformation has boosted investor participation to 134 million over the past five years.

Among the key initiatives he cited:

Pandey also highlighted India’s shift to T+1 settlement, one of the fastest in the world, and the expansion of UPI-ASBA for safer and faster secondary market payments.

“SEBI has reduced compliance burdens while improving transparency. We’re using advanced analytics and AI to detect complex manipulation networks,” he said.

For NRIs based in the UAE and elsewhere, SEBI’s upcoming remote e-KYC system could be a game-changer — removing a key hurdle to investing directly in India’s fast-growing markets.

It signals a clear intent: to make participation easy, digital, and borderless while keeping investor trust at the centre.

“The collaboration between fintech innovation and regulatory foresight will determine not just how fast we grow, but how safely we grow,” Pandey said.

- With inputs from Agencies