The process of opening a bank account and investing in India can be rather cumbersome for many NRIs. The insistence on physical forms, several signatures, and long timelines complicate the process. Add to this several notarisation requirements, and the associated international courier expenses, and any NRI attempting to invest in their home country could get frustrated. The intricacies of the account opening procedure also serve as a deterrent to investments.

It is in this context that Nithin Kamath, CEO and founder of Zerodha – a leading stock broking company – suggested an extension of online onboarding with the aim of streamlining regulations pertaining to NRI investments in India.

Kamath has drawn several similarities with the present-day NRI account opening process and the pre-digital era of retail broking. Opening an account manually meant personally visiting a bank or broker’s office, filling up multiple forms and signing them, and submitting various documents. This is where NRI onboarding gains importance.

An NRE or NRO account is inevitable for any NRI who wants to invest in India. Secondly, one needs to have a PAN card, address proof, a bank account statement and passport copy in place to get the KYC and other details done. At present, the onboarding procedure encompasses KYC verification and authorisation through a signature.

Now, any NRI with an NRE/NRO bank account would already have the updated KYC which is accessible to other financial intermediaries through CKYC. CKYC refers to Central KYC (Know Your Customer), an initiative of the Indian Government, the aim of which is to have a structure in place that allows investors
to complete their KYC only once before interacting with various entities across the financial sector.

Tagging the finance ministry’s official handle, Kamath tweeted, “NRIs may not have an Aadhaar or one linked to an Indian mobile number to e-sign. Now that we are allowing UPI for NRIs mapped to their international numbers, what if we use that to authorise (e-sign) and open a trading and demat account online?”‘

Unified Payments Interface (UPI) brings multiple bank accounts into a single mobile application merging several banking features and enabling immediate money transfer through a mobile device round the clock.

Kamath also remarked on LinkedIn: “Hopefully, NRI onboarding will make things easier. Apart from helping build on the India story globally, it can also help the rupee.”

“NRIs are among the wealthiest outside India. We need to make it easy for them to invest back home,” Kamath further tweeted.

Regulations on NRI shareholding aim to safeguard Indian companies from excessive foreign influence. However, the government must assess the advantages and disadvantages and proceed cautiously to avoid compromising the country’s economic interests.