The Securities and Exchange Board of India (SEBI) has issued the instrument titled "Review of Know Your Client process for individual Person Resident Outside India clients" — Circular No. HO/38/30/12(3)2026-MIRSD-POD2/I/25175/2026, dated 4 November 2026 — relaxing the digital KYC rules for individual clients who live outside India. From 3 December 2026, an individual Non-Resident Indian (NRI), Overseas Citizen of India (OCI) or foreign national who is located in a Financial Action Task Force (FATF) compliant country will be able to complete KYC digitally from abroad, without needing to be physically present in India during digital onboarding. The circular is addressed to all intermediaries registered with SEBI under section 12 of the SEBI Act, 1992, recognised stock exchanges, recognised clearing corporations and depositories, and is signed by Divya Hamirbasia, Deputy General Manager.
Quick Answer: SEBI Circular No. HO/38/30/12(3)2026-MIRSD-POD2/I/25175/2026 dated 4 November 2026 lets individual PROI clients — NRIs, OCIs and foreign nationals — in FATF-compliant countries complete KYC digitally from outside India, with effect from 3 December 2026; intermediaries must send the completed KYC information to the KRA within 3 working days, and clients in FATF non-compliant countries stay on the existing process.
In plain business-owner language, the change removes a trip. Until now, an NRI sitting in Dubai, Singapore or London who wanted to open a trading or demat account often hit a wall at the KYC step: the digital process demanded that the client be physically located in India at the time of onboarding. From 3 December 2026, for clients in FATF-compliant countries, that wall comes down — the documents can be submitted digitally from where the client actually lives.
What the circular actually changes
The old position is stated in the circular itself. The extant KYC Master Circular required, during digital KYC, that "the physical location of the client is in India" — which, the circular says, "in effect restricts a client outside India at the time of on-boarding, to submit the KYC documents and complete the KYC process digitally." Paragraph 4.1 of the new circular relaxes that requirement: "The requirement of a client being in India during digital on-boarding is being relaxed for an individual PROI client located in a Financial Action Task Force (FATF) compliant country and the intermediary may accept digital submission of KYC information supporting documents from such client."
Two definitions fix the scope. An "individual PROI client" means an NRI, an OCI or a foreign national. "PROI" itself is the FEMA concept: under section 2(w) of the Foreign Exchange Management Act, 1999, a Person Resident Outside India is a person who is not resident in India. The relaxation is for individual PROI clients — the circular does not extend the same digital route to non-individual PROI clients, and nothing in it should be read as covering companies or other entities.
Old position vs new position
Who is covered — and who is not
- Covered: individual NRIs, OCIs and foreign nationals located in a FATF-compliant country, for onboarding and for re-KYC.
- Not covered by the relaxation: clients residing in FATF non-compliant countries — for them, the extant KYC process continues, and the new provisions do not come into effect (paras 7 and 8.4).
- Separate track: foreign nationals seeking registration as Foreign Portfolio Investors remain governed by the FPI Master Circular SEBI/HO/AFD/AFD-PoD-2/P/CIR/2024/70 dated 30 May 2024, or amendments to it. Do not confuse this PROI KYC circular with SEBI's separate 30 October 2026 circular reviewing FPI KYC (which takes effect 1 December 2026) — they are different instruments for different client classes.
- Timing boundary: KYC undertaken before 3 December 2026 continues to be governed by the extant KYC provisions (para 8.5). The new route opens on 3 December 2026, thirty days from the circular's issue date — it is not available the day the circular was published.
How the digital KYC will work in practice
The circular sets the mechanics intermediaries must follow for a compliant-country individual PROI client:
- Form and signature: the KYC form may be collected in physical form or through an app, website or digital mode. A scanned physical form, or a digital KYC form under electronic signature, is permitted. A specimen signature may be a cropped image under electronic signature — but where the submission is digital, the wet signature is given before the intermediary during Video In-Person Verification (VIPV).
- Documents: documents must be in English, or translated into English and attested by a certifying authority.
- Identity and address check: on first approach or update, the intermediary seeks the PAN and CKYC ID if available, then retrieves records from the KRA or CKYCRR. Additional details are obtained only where there is a change, incomplete or non-conforming details, lapsed validity of an officially valid document (OVD) or deemed OVD, a need to verify identity or address, or enhanced due diligence or risk profiling.
- Video verification (VIPV): the authorised official must be present with a concurrent audit. Physical in-person verification is replaced by VIPV only if physical verification is not feasible, with recorded consent, anti-spoofing and live GPS and date-time features, and face-liveness checks. The client's IP address must emanate from India or from a FATF-compliant country, and must match the country stated in the KYC form and in the OVD or deemed OVD.
- Cyber compliance: the intermediary must comply with SEBI's Cyber Security and Cyber Resilience Framework while running this digital process.
- KRA filing — the 3-working-day deadline: upon completion of KYC of an individual PROI client, the intermediary must provide the KYC information to the KRA within 3 working days from the date of completion of the KYC process (para 5.7). Updated information must also be given to the KRA, which updates the record and informs all intermediaries availing of that KRA's services for that client.
KRA records: portable, but responsibility stays with the intermediary
Two points in the circular matter for anyone who switches brokers. First, KRA tags individual attributes as "validated" where they are verified against an official or source database. Second, "All KYC records shall be portable i.e. can be shared with another intermediary, irrespective of every individual attribute being validated or not." Portability, however, is not a transfer of responsibility: an intermediary may rely on KYC done by a SEBI-registered intermediary (through the KRA) or by an entity regulated by another financial-sector regulator (through CKYCRR), but it "shall have the ultimate responsibility for the KYC of its clients". A broker that onboards a client on the strength of another intermediary's KYC still owns the compliance outcome.
What gets superseded on 3 December 2026
Paragraph 8 of the circular supersedes, to the relevant extent and on the circular coming into effect:
- the KYC Master Circular SEBI/HO/MIRSD/SECFATF/P/CIR/2023/169 dated 12 October 2023;
- Circular CIR/MIRSD/16/2011 dated 22 August 2011, "Simplification and Rationalization of Trading Account Opening Process"; and
- Circular HO/38/30/12(1)2025-MIRSD-SEC-FATF dated 10 December 2025, "Relaxation on geo tagging requirement in India for NRIs while undertaking re KYC" — the earlier, narrower geo-tagging relaxation for NRI re-KYC, now overtaken by the fuller digital route.
Intermediaries should read the supersession as "to such extent" — the old circulars are displaced where the new circular covers the ground, not necessarily wholesale. Compliance teams should map their KYC manuals against the new circular rather than deleting old references blindly.
What to do next
- If you are an NRI, OCI or foreign national in a FATF-compliant country: you do not need to wait until you are next in India to start onboarding — but do not start before 3 December 2026 expecting the new route, since KYC done before that date follows the old provisions. Ask your broker or depository participant whether it has enabled the PROI digital route, and keep your OVD, PAN and overseas-address proof ready in English (or translated and attested).
- If you are in a FATF non-compliant country: nothing changes for you — plan on the existing KYC process and do not assume the digital route applies.
- If you are an intermediary: update the onboarding journey before 3 December 2026 — VIPV conditions (IP country match, official presence, concurrent audit, liveness checks), the overseas-address field, international mobile numbers, e-signature handling, and the 3-working-day KRA filing clock. The KRA deadline is the sharpest operational risk: it runs from completion of KYC, not from account activation.
- If you are re-doing KYC: the same relaxed process applies to re-KYC for compliant-country PROI clients — but check whether your existing KYC record is already portable through the KRA before re-submitting documents.
- Do not assume this covers FPI registration: foreign nationals seeking FPI registration follow the FPI Master Circular route, not this circular.
Bottom line for a business owner: if your clients, investors or family members live abroad, their Indian market onboarding no longer needs an India trip for KYC — provided they are individuals in a FATF-compliant country and the onboarding happens on or after 3 December 2026. If you run the intermediary, the work shifts from collecting people in a room to running a compliant video verification and hitting a 3-working-day KRA deadline.
Frequently asked questions
What is SEBI's PROI KYC circular of 4 November 2026? It is SEBI Circular No. HO/38/30/12(3)2026-MIRSD-POD2/I/25175/2026, titled "Review of Know Your Client process for individual Person Resident Outside India clients", which relaxes digital KYC for individual PROI clients in FATF-compliant countries with effect from 3 December 2026.
Can an NRI complete KYC without coming to India? Yes, from 3 December 2026, if the NRI is located in a FATF-compliant country — the circular relaxes the requirement of being in India during digital onboarding, and the intermediary may accept digital submission of KYC information and supporting documents.
Does the new KYC rule apply to OCIs and foreign nationals too? Yes. An individual PROI client means an NRI, an OCI or a foreign national. The relaxation is for individual clients only, not for non-individual PROI clients.
When does the SEBI PROI KYC circular come into effect? Thirty days from its issue date — that is, from 3 December 2026 — for onboarding of every individual PROI client except a client in a FATF non-compliant country. KYC undertaken before that date follows the existing provisions.
What if the client lives in a FATF non-compliant country? The existing KYC process continues to apply, and the new provisions do not come into effect for that client.
How quickly must the intermediary send KYC details to the KRA? Within 3 working days from the date of completion of the KYC process, and updated information must also be shared with the KRA.
Does the circular apply to re-KYC? Yes — the same process applies to re-KYC of a client in a FATF-compliant country.
Is this the same as SEBI's FPI KYC circular? No. This circular covers individual PROI clients (NRIs, OCIs, foreign nationals). Foreign nationals seeking FPI registration remain under the FPI Master Circular of 30 May 2024, and SEBI's separate 30 October 2026 FPI KYC review is a different instrument.
Sources
- SEBI Circular No. HO/38/30/12(3)2026-MIRSD-POD2/I/25175/2026 dated 4 November 2026, "Review of Know Your Client process for individual Person Resident Outside India clients" (official circular page and PDF): SEBI official circular page and SEBI official circular PDF
Note: every operative point above is drawn from the circular text itself. Points about the August 2026 consultation background are not asserted here because the circular text read for this article does not itself state them; where the circular is silent, this article says so rather than filling the gap from news reports.
