Mumbai: The Reserve Bank of India has simplified Know Your Customer compliance for foreign portfolio investors, allowing Indian banks to accept specified documents certified by authorised officials outside India.
The relaxation was introduced through the RBI (Commercial Banks–Know Your Customer) Amendment Directions, 2026, and came into effect immediately.
The facility was previously available to non-resident Indians and persons of Indian origin. Its extension to FPIs is expected to make account-related documentation easier for overseas investors participating in Indian financial markets.
Foreign portfolio investors will no longer need to get the relevant KYC documents certified through a process conducted in India. They can use recognised certification channels in their country of residence before submitting the original certified copies to an Indian bank.
Who Can Certify FPI Documents?
Under the amended RBI KYC rules, documents may be certified by authorised officials at overseas branches of Scheduled Commercial Banks registered in India.
Certification may also be provided by officials at foreign bank branches that have correspondent relationships with Indian banks.
Other recognised authorities include a Notary Public abroad, Court Magistrate, Judge, Indian Embassy or Consulate General in the country where the investor resides.
Banks Must Continue KYC Verification
The amendment eases the certification process but does not remove the obligation of banks to conduct proper KYC checks on foreign portfolio investors.
The RBI has retained its existing definition of a certified copy. Where Aadhaar offline verification cannot be completed, the bank must compare the submitted copy of proof of Aadhaar possession—or another officially valid document—with the original.
An authorised bank officer must record the verification on the document copy in accordance with the applicable regulations.
FPI Outflows Remain Elevated
The regulatory change comes as FPI outflows from Indian equities reached ₹23,676 crore during September through Friday.
Foreign investment sentiment remains vulnerable to the Iran-US conflict, elevated crude oil prices and the US 10-year bond yield near 5%. However, India’s resilient economic growth and expectations of stronger corporate earnings could offer some support to future inflows.
