Zerodha co-founder and CEO Nithin Kamath has a suggestion for the Finance Ministry to modify the “cumbersome” process of opening demat accounts online for non-residents Indians (NRIs).
The Zerodha boss said that with Indian markets doing well, there’s a great interest to invest here. He, however, believes the tough onboarding process leads to massive drop-offs.
“Allowing NRIs to open demat accounts online is the low-hanging fruit to attract money to India. The process today is physical and cumbersome. With Indian markets doing well, there’s a great interest to invest here, but the tough onboard process leads to massive dropoffs,” Kamath tweeted.
The Zerodha CEO insisted on making onboarding “fully digital” for NRIs.
Explaining further, he said, “Since NRIs send and receive funds from bank accounts with KYC, we can make onboarding fully digital and make it as easy as it is for a resident Indian to open a trading account.”
“Online onboarding is the main reason for increased retail participation in India,” he wrote on Twitter.
Kamath went on to further explain the process of digital onboarding of NRIs into two parts.
“There are 2 parts to the onboarding: KYC & authorization (sign). An NRI with an NRE/NRO bank account will already have the updated KYC, accessible to other financial intermediaries through CKYC. NRIs may not have an Aadhaar or one linked to an Indian mobile number to e-sign,” he noted.
Kamath tagged the Ministry of Finance and asked: “Now that we are allowing UPI for NRIs mapped to their international numbers, what if we use that to authorize (e-sign) and open a trading & demat account online?@FinMinIndia”
He also said that NRIs are among the wealthiest outside India. “We need to make it easy for them to invest back home,” Kamath wrote in a Twitter thread.
UPI for NRIs
The National Payments Corporation of India (NPCI) has recently permitted NRIs from 10 countries to digitally transfer funds using the Unified Payments Interface (UPI) platform from NRE/NRO accounts.
The NPCI said it has been receiving requests for allowing non-residents to use international mobile numbers for transacting in UPI.
In the first phase, phone numbers from 10 countries – Singapore, Australia, Canada, Hong Kong, Oman, Qatar, the US, Saudi Arabia, United Arab Emirates, and the UK have been allowed to be used on UPI. NPCI said it could extend this to other nations as well.
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