Banks across every category RBI regulates — commercial banks, small finance banks, local area banks, regional rural banks, urban co-operative banks and rural co-operative banks — got the same relaxation on the same day. A document-verification shortcut previously reserved for Non-Resident Indians and Persons of Indian Origin now applies to Foreign Portfolio Investors too, and it applies with immediate effect.
RBI issued six parallel Amendment Directions, 2026 on 18 September 2026, each amending the "Certified Copy" definition in the respective bank category's Know Your Customer Directions, 2025 (dated 28 November 2025). The substantive change is identical across all six: banks may now accept the alternative overseas-certified-copy route for FPIs, exactly as they already could for NRIs and PIOs. Each Direction is signed by Veena Srivastava, Chief General Manager.
Quick Answer: What Changed?
RBI's Know Your Customer Directions, 2025 already let banks accept an original certified copy of identity documents — attested by specified overseas authorities instead of standard in-person comparison — for NRIs and PIOs. Effective 18 September 2026, six Amendment Directions extend this same facility to Foreign Portfolio Investors (FPIs), across all six categories of RBI-regulated banks.
The list of authorities who may certify the copy is unchanged: authorised officials of overseas branches of Indian Scheduled Commercial Banks, overseas banks with correspondent relationships with Indian banks, a Notary Public abroad, a Court Magistrate, a Judge, or the Indian Embassy/Consulate General in the customer's country of residence.
Quick Reference: The Six Circulars
All six circulars are dated 18 September 2026, come into force immediately, and are signed by Veena Srivastava, Chief General Manager. The Commercial Banks and Small Finance Banks Directions amend paragraph 5(1)(v), while the Local Area Banks, Regional Rural Banks, Urban Co-operative Banks and Rural Co-operative Banks Directions amend paragraph 4(1)(v) — a difference in paragraph numbering between the respective 2025 principal Directions, not a difference in substance.
The enabling powers cited also differ slightly: the Commercial Banks Direction is issued under section 35A of the Banking Regulation Act, 1949, alongside the Payment and Settlement Systems Act, 2007, FEMA, 1999, and the PML (Maintenance of Records) Rules, 2005; the other five Directions additionally cite the Banking Regulation Act (AACS), 1949 read with section 56 of that Act — the co-operative and regional-bank-specific enabling provision.
What Changed?
Normally, a bank verifies a customer's ID by physically comparing the copy against the original and having its own officer note that comparison. For customers who live abroad, that's often impractical. So RBI allows banks to instead accept a copy that's already been certified as a true copy of the original by one of six specified authorities overseas — an Indian bank's overseas branch official, a correspondent bank abroad, a foreign notary, a magistrate, a judge, or the Indian embassy/consulate. This amendment simply adds FPIs to the list of customers who can use that shortcut.
Why This Matters
Foreign Portfolio Investors are, almost by definition, non-resident entities transacting into India from abroad — funds, sovereign wealth vehicles, foreign institutional investors and similar structures registered with SEBI. Until this amendment, the certified-copy shortcut existed only for individual NRIs and PIOs opening accounts, leaving FPI account-opening and KYC refresh processes to rely on standard in-person document comparison — a genuine friction point for an entity with no physical presence in India.
By extending the same six-authority certification list to FPIs, RBI removes that friction without creating a separate verification standard. The change is narrow and mechanical: it does not alter what documents are required, only who may certify a copy of those documents on the customer's behalf when in-person verification isn't practical.
Who Is Affected?
Commercial Banks, Small Finance Banks, Local Area Banks, Regional Rural Banks, Urban Co-operative Banks, and Rural Co-operative Banks are each covered by their own, near-identical Amendment Direction.
FPIs can now have their KYC documents certified through the same overseas-authority route previously available only to NRI/PIO individual customers.
Onboarding checklists, KYC policy documents and staff training materials referencing the certified-copy facility should be updated to include FPIs as an eligible customer category, effective immediately.
The standard in-person document comparison requirement for resident Indian customers is untouched by this amendment.
The Certified-Copy Authorities — Unchanged List
Each Amendment Direction reproduces the same six categories of authority who may certify the original copy on behalf of an NRI, PIO, or now an FPI customer:
- Authorised officials of overseas branches of Scheduled Commercial Banks registered in India;
- Branches of overseas banks with whom Indian banks have relationships;
- Notary Public abroad;
- Court Magistrate;
- Judge; or
- Indian Embassy / Consulate General in the country where the non-resident customer resides.
Point to verify. None of the six circulars define "Foreign Portfolio Investor" afresh — the term is used without an inline definition, so banks should apply the FPI definition already in force under applicable SEBI/FEMA regulations rather than assume a new or narrower meaning has been introduced here.
When Does It Apply?
Practical Implications for Compliance Teams
Update KYC policy documents now, not later. Because the amendment takes immediate effect, banks should treat any FPI KYC file processed on or after 18 September 2026 as eligible for the certified-copy alternative, and update internal KYC manuals and onboarding SOPs to reflect the expanded customer scope without waiting for a further circular.
Confirm the correct paragraph reference for each bank type. Commercial Banks and Small Finance Banks number this clause as paragraph 5(1)(v), while Local Area Banks, Regional Rural Banks, Urban Co-operative Banks and Rural Co-operative Banks number it as paragraph 4(1)(v). A bank operating across more than one licence category (for example, a banking group with both a commercial bank and a regional rural bank) should update each entity's documentation against its own correct paragraph reference rather than assuming uniform numbering.
No new documentary burden — only an added eligible class. The amendment does not change what must be certified, only who may benefit from certification by an overseas authority instead of in-person verification. Compliance teams do not need to build new document checklists — only to extend the existing NRI/PIO checklist logic to FPI customer records.
Compliance Checklist
Frequently Asked Questions
When do these Amendment Directions take effect?
Immediately. Each of the six Directions, dated 18 September 2026, states it "shall come into force with immediate effect" — there is no future commencement date or transition window.
What exactly changed for FPIs?
FPIs can now use the same alternative certified-copy KYC verification route that was already available to NRIs and PIOs — meaning a bank may accept an original certified copy of the customer's identity document, attested by one of six specified overseas authorities, instead of requiring standard in-person comparison against the original.
Which banks does this apply to?
All banks RBI regulates: Commercial Banks, Small Finance Banks, Local Area Banks, Regional Rural Banks, Urban Co-operative Banks, and Rural Co-operative Banks — each covered by its own parallel Amendment Direction issued the same day.
Who can certify the copy for an FPI customer?
Any one of six specified authorities: authorised officials of overseas branches of Scheduled Commercial Banks registered in India; branches of overseas banks with relationships with Indian banks; a Notary Public abroad; a Court Magistrate; a Judge; or the Indian Embassy/Consulate General in the customer's country of residence.
Does this change the standard KYC verification process for resident customers?
No. The default process — comparing the document or Aadhaar proof with the original, with an authorised bank officer recording the comparison — is unchanged. The amendment only widens who may use the alternative overseas-certification route, which remains limited to NRIs, PIOs, and now FPIs.
Why does the amended clause number differ between bank categories?
The Commercial Banks and Small Finance Banks KYC Directions, 2025 number the relevant clause as paragraph 5(1)(v), while the KYC Directions, 2025 for Local Area Banks, Regional Rural Banks, Urban Co-operative Banks and Rural Co-operative Banks number the equivalent clause as paragraph 4(1)(v). This reflects differences in the internal structure of each principal Direction, not a difference in the substance of the amendment.
CorpLawUpdates Analysis
Issuing six parallel, near-identical circulars on the same day — rather than a single omnibus amendment — reflects how RBI's KYC framework is structured: each category of regulated bank has its own standalone Directions rather than a single unified rulebook, so every substantive change has to be replicated once per category. For a bank operating multiple licences, or for an FPI dealing with more than one bank category, the practical effect is identical no matter which circular is read.
The change itself is narrow and low-friction by design. It does not touch documentary standards, does not create a new class of relaxed diligence, and does not alter the default verification method for any customer type. It simply recognises that FPIs, like NRIs and PIOs, are frequently non-resident entities for whom requiring in-person document comparison in India is impractical, and extends an already-tested alternative to close that gap.
Source Note
Documents: Six RBI circulars, each titled "Reserve Bank of India ([Bank Category] – Know Your Customer) Amendment Directions, 2026," dated 18 September 2026
Issuing authority: Reserve Bank of India
Reference numbers: RBI/2026-27/257 (Commercial Banks), RBI/2026-27/258 (Small Finance Banks), RBI/2026-27/259 (Local Area Banks), RBI/2026-27/260 (Regional Rural Banks), RBI/2026-27/261 (Urban Co-operative Banks), RBI/2026-27/262 (Rural Co-operative Banks)
Amends: The respective Reserve Bank of India ([Bank Category] – Know Your Customer) Directions, 2025, each dated 28 November 2025
Signatory: Veena Srivastava, Chief General Manager
This article is for informational and educational purposes only and does not constitute legal or regulatory advice. Readers should verify the applicable primary regulatory source before taking action.
