How NRIs can invest in Indian mutual funds
Subscribe to enjoy similar stories. MUMBAI : Mutual funds have emerged as an attractive investment vehicle for non-resident Indians (NRIs) keen on participating in India’s booming economy. Unlike direct investment in stocks, which involves cumbersome account setups, regulatory complexities, and high costs for Portfolio Investment Scheme (PIS) or Non-PIS demat accounts, mutual funds offer a streamlined and cost-effective alternative.
Mutual funds also allow a person to spread risk across market caps, sectors and asset classes, providing NRIs with professionally managed portfolios and long-term growth potential without the intricacies of managing individual stocks. Here's the Mint step-by-step guide to help NRIs invest in mutual funds online. It's the first and most essential step for NRIs to invest in Indian mutual funds, as mandated by the Securities and Exchange Board of India (Sebi).
NRIs must be present in the country to complete the KYC process. "This requirement has been a significant hurdle for NRIs who cannot frequently travel to India," said Dipen Shah, CFP and founder of NRI FinOne. It has left many NRIs with limited options, forcing them to delay their investments or rely on third-party intermediaries, wealth management firms, or local banks offering to complete the KYC process.
However, per the 2023 Sebi Master Circular on KYC norms for the securities market, NRIs can complete the KYC process online after coming to India. According to the circular, the online KYC process for NRIs is to be facilitated through apps developed by Sebi-registered intermediaries. These apps must include features such as live photograph capturing, scanning of officially valid documents (via Digilocker), and video verification in a
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