The Reserve Bank of India (RBI) has eased Know Your Customer (KYC) documentation requirements for foreign portfolio investors (FPIs), allowing banks to accept identity documents certified by authorised institutions and officials overseas instead of requiring them to verify the original documents themselves.
The changes, announced on Friday (Sept 18), apply to commercial banks, small finance banks, local area banks, regional rural banks and urban and rural co-operative banks. They came into force with immediate effect on September 18, 2026.
The facility was previously available to non-resident Indians (NRIs) and persons of Indian origin (PIOs). The RBI has now extended it to FPIs, providing an alternative method of submitting certified documents for identity verification.
Foreign portfolio investors include overseas investors participating in India’s financial markets. The amendment concerns the certification of KYC documents submitted to banks and does not remove the requirement to establish a customer’s identity.
Who can certify the documents?
Under the revised directions, banks may accept original certified copies of identity documents from FPIs if they have been certified by specified authorities.
These include authorised officials of overseas branches of Indian scheduled commercial banks and branches of foreign banks with which Indian banks have established relationships.
Certification may also be obtained from a notary public abroad, a court magistrate, a judge or an Indian embassy or consulate general in the country where the non-resident customer resides.
Under the standard procedure, a bank compares the customer’s officially valid document with the original and records the verification through an authorised officer.
The alternative arrangement allows banks to rely on documents certified by the specified authorities instead of carrying out that comparison themselves.
The change could make documentary verification more convenient for eligible overseas investors who would otherwise need to present original documents directly to a bank for certification.
What changes for banks?
The RBI has issued separate amendments to the KYC directions governing each of the six banking categories.
The revised provisions amend the directions issued on November 28, 2025, under the framework of the Prevention of Money Laundering Act, 2002 and the Prevention of Money Laundering (Maintenance of Records) Rules, 2005.
Although the amendments have been issued separately, they introduce the same alternative certification facility for FPIs.
For banks, the change provides an additional method of obtaining certified customer documents. It does not dispense with KYC obligations or permit banks to accept documents certified by authorities outside the specified categories.
The RBI has not announced any change to the underlying identity verification requirements or introduced a separate relaxation for domestic customers through these amendments.
The six directions also do not include a corresponding amendment for non-banking financial companies (NBFCs). Their KYC requirements are governed by separate RBI directions.
