Description

SEBI relaxes the requirement for NRI clients to be physically located in India when undertaking re-KYC through digital mode, allowing geo-location to match their country of residence.

Summary

SEBI has modified the Master Circular on KYC to ease the re-KYC process for Non-Resident Indians (NRIs). The requirement that clients must be physically located in India during digital KYC verification has been relaxed specifically for NRI clients undertaking re-KYC. However, the GPS location captured must still match the latitude and longitude of the country mentioned in the client’s Proof of Address.

Key Points

  • Physical location requirement in India is relaxed for NRI clients during re-KYC through digital mode
  • Relaxation applies only to existing clients undergoing re-KYC, not new client onboarding
  • GPS location must match the country specified in the client’s Proof of Address
  • Apps must prevent connections from spoofed IP addresses
  • Random action initiation and time stamping features remain mandatory
  • Modification applies to Para 51 of Master Circular on KYC dated October 12, 2023

Regulatory Changes

Para 51 of the Master Circular on KYC (dated October 12, 2023) has been amended to include:

  1. Relaxation for NRIs: The requirement of physical location being in India during digital onboarding is now relaxed for undertaking re-KYC for existing NRI clients.

  2. Geographic Validation: The app must ensure that GPS location (latitude and longitude) captured matches with the latitude and longitude of the country given in Proof of Address provided by the client.

  3. Retained Requirements: Apps must continue to have features for random action initiation, time stamping, and prevention of spoofed IP address connections.

Compliance Requirements

Applicable to:

  • All intermediaries registered with SEBI under Section 12 of SEBI Act, 1992
  • Stock Exchanges

Action Required:

  • Update digital KYC systems to allow geo-location outside India for NRI re-KYC
  • Ensure GPS validation matches client’s country of residence as per Proof of Address
  • Maintain anti-spoofing controls for IP addresses
  • Continue implementing random action initiation and time stamping features

Important Dates

  • Circular Issue Date: December 10, 2025
  • Effective Date: Immediate (no transition period specified)

Impact Assessment

Operational Impact:

  • Significantly improves accessibility for NRI clients seeking to complete re-KYC requirements
  • Reduces operational friction for intermediaries serving NRI clientele
  • May increase re-KYC compliance rates among NRI investors

Market Impact:

  • Low direct market impact
  • Potentially positive for brokers and intermediaries with large NRI client bases
  • Addresses stakeholder concerns regarding KYC access barriers

Technical Impact:

  • Intermediaries may need to update their digital KYC apps to validate international geo-locations
  • Systems must be configured to cross-verify GPS coordinates with country data from Proof of Address documents

Impact Justification

This circular provides operational ease for NRI clients and intermediaries by relaxing geo-location requirements for re-KYC, but does not fundamentally change KYC obligations or affect market operations directly.