SEBI consultation paper on reviewing KYC for NRIs

General
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This could be a big step towards making investing in India easier for NRIs. Sharing @nithin 's tweet from today:

I’ve spoken many times about the need to make it easier for NRIs to invest in India. Finally, some great news. SEBI just released a consultation paper proposing a fully digital onboarding process for NRIs, without needing them to be physically present in India! Kudos to SEBI for this pragmatic move.

This is huge because NRIs tend to have large amounts of capital to invest and are a highly durable source of inflows into Indian markets. At Zerodha, we have over 50,000 NRIs investing with us today. A stat that surprised me when we looked at our numbers: ~80% of them are active. That’s a ridiculous number. They tend to invest more, take a longer-term view, and seem to be much stickier investors than regular investors.

This number has grown a lot over the last few years, mostly because the process got simpler. SEBI’s earlier changes meant NRIs no longer needed the whole PIS setup to invest. Most NRIs now come in through NRO Non-PIS accounts. These accounts work almost like resident accounts today, with intraday, BTST, and F&O access, and no CP code needed.

But one massive bottleneck has remained: onboarding.

Even today, to open an account digitally, an NRI has to be physically in India. If they are abroad, there’s a ton of physical documentation involved and dealing with international courier delays. It has always been the most painful part of the journey.

SEBI’s proposals in the new consultation paper fix this longstanding gap. They’re proposing allowing e-signs directly from the client’s country of residence. If finalized, this would relax tedious documentation rules and delays. Something that would take 2-3 weeks or even months could be done within 1-2 days. That’s a big win. By removing all this friction, this investor base can easily be many times larger.

Getting foreign money into India matters. It helps the investors, but it also helps the rupee and the larger India story. Anything that makes it easier for this money to come into India is worth doing.

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You can open an NRI account here: Open NRI demat and trading account in India with Zerodha

Link to SEBI consultation paper:

https://www.sebi.gov.in/reports-and-statistics/reports/aug-2026/consultation-paper-on-review-of-know-your-client-process-for-individual-persons-resident-outside-india_103653.html

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@nithin_kumrr What happens if resident already holding a zerodha account becomes Non resident?
Can existing account convert to NRI account? Or need to close existing and open a new NRI account?

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Hi Akash Shah, if you become an NRI while already having a Zerodha account, you don’t necessarily have to close your existing account. You can get your resident account converted to an NRO account and continue using the same account.

You can also close the existing account and open a fresh NRI account, but that’s not really necessary if you’re okay with converting the existing account to NRO.

You can click here to check out our support article for the detailed procedure.

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Will the conversion process get easier if sebi makes it easy, or people still have to go through paperwork for conversion?

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Difference between retail investors and NRI ? Does is there any restrictions for NRIs ?

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NRI can’t trade in currency and commodity Markets.

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Basically, the main difference is the residential status. NRIs can invest and trade in India, but there are some additional restrictions compared to resident investors.

NRO Non-PIS accounts can be used for equity delivery, intraday and F&O, while NRE-PIS accounts are more restricted and don’t allow intraday or F&O. You can click here to understand the difference between the account types.

There are also certain restrictions on the segments NRIs can trade in, such as currency and commodities. You can click here to know more about the applicable restrictions for NRIs.

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