Sebi Proposes Video-Based KYC for Foreign Clients, Seeks Public Comments

Why in news

Sebi proposed a video-based KYC framework for foreign clients (PROI) to streamline onboarding while ensuring regulatory compliance.

Background

The Securities and Exchange Board of India (Sebi) proposed allowing intermediaries to use video-based customer identification for Person Resident Outside India (PROI) clients. The proposal includes NRIs, OCIs, and foreign nationals, with specific provisions for FATF-compliant countries.

Facts for Prelims

• BodySebi: The primary regulator for the securities and commodity markets in India.
• FactPROI: Includes Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs), and foreign nationals.
• BodyFATF: Financial Action Task Force, an intergovernmental body that sets global standards to prevent money laundering.
• S&TVideo-based KYC: A digital onboarding process using live video to verify identity and prevent fraud.

For Mains

Q. Discuss how the adoption of digital KYC frameworks like video-based identification balances the need for financial inclusion with the necessity of preventing money laundering.

Dimensions to cover in your answer

• Ease of doing business
• Cybersecurity risks
• AML/CFT compliance
• Regulatory oversight

Keywords: Digital Onboarding · Regulatory Compliance · Financial Integrity · AML/CFT · Ease of Doing Business

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