The Finance Minister, addressing a Financial Stability & Development Council (FSDC) meeting in May, urged major regulators, including SEBI, RBI, PFRDA, and IRDAI, to implement uniform and simplified KYC norms tailored to NRIs.
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Verifying Outdated Indian Numbers, Email IDs & Aadhaar-PAN
NRIs are often tripped up during due diligence due to requirements they struggle to meet. Regulators still mandate a valid Indian mobile number or email ID, which many NRIs abroad no longer possess. Those who quote foreign numbers often get their KYC “on hold” if crucial validations—such as PAN‑Aadhaar linkage, are missing.
Further complicating matters, Aadhaar linkage remains mandatory for PAN validation, despite most NRIs lacking an Aadhaar card—making their KYC status suspended and their accounts frozen even for routine transactions.
Calls for Digital KYC and Unique NRI Onboarding Paths
The FM demanded regulators fast-track digital, NRI‑friendly onboarding, including video KYC, the use of overseas documents, and foreign mobile/email verification. Industry experts suggest regulators allow validations via foreign numbers or family Indian SIMs or facilitate e‑SIM activations.
Until revised norms take hold, many NRIs find their funds locked—unable to make fresh investments or withdraw even existing holdings. One mutual fund distributor calculates that more than 40% of NRIs have KYC status on hold, blocking basic portfolio operations.
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Moving Toward a Unified Digital KYC Ecosystem
Regulators, including RBI, are reportedly building a universal KYC framework via the Central KYC Registry, aiming to reduce duplication and streamline processes. The FM also emphasized the return of unclaimed assets to rightful owners, contingent on modernized KYC.
Analysts argue that reform is urgent: India’s NRI remittances exceed $100 billion annually. Facilitating investment by emigrants can significantly bolster domestic capital markets.
Until then, NRIs are advised to actively engage with intermediaries to resolve KYC blocks and push for digital identity solutions that accommodate their unique circumstances.
About the Author – Anirudh Mittal is a B.Sc. LL.B. (Hons.) student at National Forensic Sciences University, Gandhinagar, with a keen interest in corporate law and tech-driven legal change.