NRI investment hurdles: Zerodha’s Nithin Kamath calls for simplified onboarding

Zerodha co-founder Nithin Kamath said non resident Indians are facing challenges in investing in India due to the cumbersome account opening process, notarising requirements, and international courier costs.

Zerodha co-founder Nithin Kamath.(Mint file photo)
Zerodha co-founder Nithin Kamath.(Mint file photo)

In an X post on Wednesday, Kamath compared the NRI account opening process to the pre-digital era of retail broking, emphasising the complexity involving physical forms, numerous signatures, and extended timelines.

“NRI account opening reminds me of how retail broking worked before it became digital, thanks to Aadhaar, e-Sign, and Digilocker. Physical applications, couriers back & forth, ~30+ signatures, & more reasons to drop off,” Kamath said in a LinkedIn post.

How to open an NRI account?

To open an NRI account, Kamath explained that you need to complete physical forms and notarize documents by visiting banks or embassies. The process, averaging over 30 days from expressing interest to the first trade, is handled by a single person on the NRI team who opens around 100 accounts monthly.

In contrast, resident accounts can be opened online, allowing customers to trade within 24 hours. A member of the resident account opening team can efficiently open 40 times more accounts compared to the NRI team.

For NRIs, opening a regular savings bank account in India is not an option; they can only open a Non-Resident External Account (NRE) or a Non-Resident Ordinary Account (NRO). Continuing to use a savings account in their home country may result in hefty penalties under FEMA guidelines issued by the RBI.

How NRIs invest in Indian stocks currently?

Regarding investment options, Kamath said NRIs in India can choose between PIS and Non-PIS. The Portfolio Investment Scheme (PIS) Account allows investments from both NRE and NRO bank accounts, while the Non-PIS option supports investments exclusively from NRO accounts.

“Hopefully, NRI onboarding will become easier. Apart from helping build on the India story globally, it can also help the rupee,” he added.

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