New Delhi- The Reserve Bank of India (RBI) has simplified the KYC documentation process for Foreign Portfolio Investors (FPIs), allowing Indian banks to accept original certified copies of specified documents that have been certified by authorised officials or authorities overseas.
The change was introduced through the RBI (Commercial Banks–Know Your Customer) Amendment Directions, 2026, issued on September 18 and made effective immediately. The facility was earlier available to Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs) and has now been extended to FPIs.
What Has Changed for Foreign Portfolio Investors
Under the amended rules, banks can accept original certified copies of specified KYC documents submitted by FPIs when the documents have been certified through recognised overseas channels.
The permitted certifying authorities include authorised officials of overseas branches of Scheduled Commercial Banks registered in India, branches of overseas banks that have relationships with Indian banks, 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.
This means FPIs based outside India can use one of these recognised certification routes in their country before submitting the original certified documents to an Indian bank, rather than arranging certification through a process in India.
The amendment does not remove the underlying KYC obligations. Banks are still required to carry out the applicable customer identification and verification procedures.
RBI Retains Existing Certified Copy Requirements
The RBI has also retained the existing meaning of a certified copy under its KYC framework. Where offline Aadhaar verification cannot be carried out, the bank must compare the copy of the proof of possession of the Aadhaar number with the original. The same comparison requirement applies to other officially valid documents produced by the customer.
An authorised bank officer must record the comparison on the copy in accordance with the applicable provisions.
The amendment therefore provides FPIs with an additional way to complete document certification while keeping the core KYC verification requirements in place.
FPI Outflows Rise in September
The regulatory change comes as foreign investors have resumed selling Indian equities in September after recording inflows in July and August.
FPI outflows through the exchanges stood at ₹23,676 crore through September 19, according to data cited in recent reports. FPIs had been net buyers in July and August before turning sellers again this month.
Market observers have pointed to global factors, including elevated crude oil prices, higher US bond yields and geopolitical uncertainty, as important influences on foreign investment flows. Recent reports have also highlighted the ongoing Iran-US conflict and its potential impact on crude prices as factors that could affect FPI activity.
At the same time, a resilient Indian economy and expectations of stronger earnings growth have been cited as positive factors for Indian markets.
Disclaimer
This article is intended for general informational purposes and is based on the RBI notification and reported market data available at the time of writing. Regulatory requirements and market figures can change. Investors and financial institutions should refer to the latest RBI notifications, official records and other authoritative sources before taking decisions based on this information. This article should not be considered financial or investment advice.