Circular No. HO/38/30/12(1)2025 MIRSD SEC FATF, Dated 10.12.2025
1. Background
SEBI has issued amendments to the Master Circular on Know Your Customer (KYC) to streamline the re-KYC process for Non-Resident Indians (NRIs). The revision responds to industry feedback regarding practical challenges faced by NRIs when undergoing re-KYC due to location-based restrictions in digital onboarding and verification.
2. Relaxation of Physical Location Requirement
Earlier, digital KYC procedures required clients to be physically located in India during certain verification steps. SEBI has now relaxed this requirement for existing NRI clients undergoing re-KYC through digital mode.
2.1 What Changes?
- Existing NRIs can complete re-KYC digitally from outside India.
- The earlier condition that a client must be physically within India at the time of re-KYC will not apply to NRI clients.
This significantly improves convenience and reduces compliance friction for NRIs who cannot travel to India merely for KYC renewal.
3. Revised Para 51 – Geo-Tagging and System Checks Continue
Although the physical-presence requirement is relaxed, risk-mitigation controls remain mandatory.
Under the revised Para 51:
3.1 Geo-Tagging Remains Compulsory
- The system must capture GPS coordinates of the NRI client.
- These coordinates must match the Proof of Address (PoA) submitted.
3.2 Anti-Spoofing and IP-Verification Measures Required
- Regulated entities must ensure no spoofed, masked, or manipulated IP connections are used during re-KYC.
- Systems must be able to detect and prevent VPN masking or fake geo-location attempts.
3.3 Other KYC Validations Remain Unchanged
- Facial verification (where applicable)
- Document authentication
- System-driven checks mandated by SEBI and KRA
The intention is to allow flexibility without compromising security, authenticity, or anti-fraud safeguards.
4. Purpose and Regulatory Intent
SEBI’s modification aims to:
- Facilitate easier compliance for NRIs who face geographical constraints
- Maintain robust KYC integrity and fraud prevention controls
- Align regulatory practice with digital transformation trends
- Ensure that intermediaries can onboard and maintain NRI clients without disruption
This balances user convenience with risk management and supervisory oversight.
5. Implications for Market Intermediaries
REs (brokers, depositories, RTAs, RIAs, etc.) must:
- Update internal KYC workflows to remove the “must be in India” check for NRI re-KYC
- Continue geo-tagging and ensure GPS data matches PoA
- Implement tools to detect IP spoofing or VPN-based masking
- Train staff on revised requirements and update customer communication templates
- Modify backend KYC logic and reporting formats in line with changes to Para 51
6. Implications for NRI Clients
- Re-KYC can now be completed seamlessly from abroad
- No need for travel to India solely for verification
- Must ensure GPS-based address matches documentation during digital re-KYC
- Should avoid using VPNs during verification to prevent rejection
Click Here To Read The Full Circular
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