Slug: rbi-kyc-amendment-fpi-document-verification-2026
Excerpt: India’s RBI has amended bank KYC directions, allowing certified overseas documents for foreign portfolio investors under specified verification conditions.
The Reserve Bank of India (RBI) issued amendments to its Know Your Customer (KYC) Directions on September 18, 2026, introducing changes to document verification requirements for foreign portfolio investors (FPIs). The amendments extend an existing facility for non-resident Indians (NRIs) and persons of Indian origin (PIOs) to FPIs, allowing banks to accept original certified copies of specified documents from authorised overseas officials.
The changes apply to several categories of banks, including commercial banks, small finance banks, regional rural banks, urban co-operative banks and other specified banking institutions. The amendments took effect immediately upon publication.
What has changed in the RBI’s KYC directions?
The RBI’s September 18 amendments modify the existing KYC Directions, 2025. Previously, the alternative document certification facility was available to NRIs and PIOs. The amendments extend this facility to foreign portfolio investors.
Under the amended provisions, banks may alternatively obtain original certified copies of documents for eligible FPIs. These documents may be certified by specified overseas authorities and authorised officials, including authorised officials at overseas branches of scheduled commercial banks registered in India, overseas bank branches with which Indian banks have relationships, notaries public abroad, court magistrates, judges, and Indian embassies or consulates.
This provides an additional document verification route for eligible non-resident customers. It does not remove the banks’ existing KYC obligations or make document verification optional.
Which financial institutions are affected?
The amendments were issued separately for different categories of regulated banking institutions. They cover commercial banks, small finance banks, regional rural banks, urban co-operative banks, rural co-operative banks and local area banks.
The individual amendment directions modify the respective KYC frameworks applicable to these institutions. The precise provisions should therefore be read alongside the relevant direction for each type of bank.
The changes are particularly relevant to institutions that maintain accounts or provide banking services to foreign portfolio investors and need to verify documents issued outside India.
Why has the RBI amended the document verification process?
The amendment extends an existing alternative certification arrangement to another category of non-resident customer. By permitting certification through specified overseas authorities, it provides banks with an additional means of obtaining eligible documents when conducting customer verification.
The change concerns the method of obtaining certified documents. It should not be interpreted as a general relaxation of customer identification, customer due diligence or anti-money laundering requirements.
Banks remain responsible for complying with the applicable KYC Directions and the Prevention of Money Laundering Act, 2002, together with the associated rules.
Why this matters for AML and KYC professionals
The RBI’s amendment has several practical implications for AML and KYC teams at affected financial institutions.
1. Updated document verification procedures
Banks should review their existing procedures for collecting and verifying documents from FPIs. Where applicable, their internal procedures may need to incorporate the newly permitted certification route and identify the authorised certifiers.
2. Consistent customer due diligence
The availability of an alternative document certification method does not eliminate the need for customer due diligence. KYC teams must continue to follow the applicable customer identification and verification requirements.
3. Staff training and operational controls
Compliance teams may need to update internal guidance and train relevant staff on the amended requirements. Clear procedures can help ensure that documents are accepted only when they meet the specified certification conditions.
4. Regulatory compliance and record-keeping
Banks should ensure that their document verification processes remain consistent with the applicable RBI directions and maintain appropriate records to demonstrate compliance.
5. Cross-border customer onboarding
The expanded facility is relevant to banks serving overseas investors. Compliance teams should review how the alternative certification process fits into their existing onboarding and customer verification arrangements.
Key takeaways
- The RBI issued amendments to its KYC Directions on September 18, 2026.
- The changes extend an alternative document certification facility to foreign portfolio investors.
- Specified overseas authorities and authorised officials can certify eligible original documents.
- The amendments cover several categories of regulated banks and took effect immediately.
- Banks must continue to meet their applicable KYC and AML obligations.
Source: https://trackrbi.com/notification/13699/reserve-bank-of-india-commercial-banks-know-your-customer-amendment-directions
