K.V. Shamsudheen, Chairman of Pravasi Bandhu Welfare Trust, has appealed to Ms. Nirmala Sitharaman, Minister of Finance, the Government of India to rescind a recent change in know your customer (KYC) norms after the Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CRSARSI) changed the requirements for verifying the identity of customers.
This, he said, has made it difficult for NRI investment flow to reach the local markets.
Mr. Shamsudheen, who is also managing director of Barjeel Geojit Financial Services, said that Non-resident Indians (NRIs) are struggling to invest in Indian stocks, bonds, mutual funds or other deposit schemes after the CRSARSI changed the requirements for verifying the identity of customers.
He made representations also to the Reserve Bank of India, and other authorities requesting reinstatement of the old system where bank statements and passport copy were accepted as address proof
The authority recently announced that all existing and new investors, including NRIs, should furnish acceptable documents as proof of correspondence address as a measure to check money laundering and proxy investments to park unaccounted money.
Now NRIs only have the option to submit their utility bill as proof of foreign address.
In the letter, Mr Shamsudheen said that he wished to highlight the pain points NRIs have in complying with the new requirement:
- Most of the NR1s live in bachelor / labour accommodation meaning a large number of people stay in a single rented accommodation. They do not have a, utility bill or telephone bill in their name.
- Many NRIs do not subscribe for landline phone connections.
- Most of the low income Nil. subscribe to prepaid mobile phone connections which do not produce a bill.
- Post paid mobile connections produce a bill, however it is not acceptable as Utility proof.
- NRIs may have employer sponsored accommodation, hence utility bills are in the sponsor’s name.
- In some places, Utility bills may be written in Arabic.
- Spouse may not be able to provide utility bills if the accommodation is not in her/his name.
- Investment made by parents for their children also have constraints in providing utility bills in their name on attaining majority, while earlier father’s NRE bank account Statement was accepted.
It is therefore extremely important to look into the above issue so that NRIs can continue to invest and participate in the India growth story. He requested that NRI Bank statement for address proof be accepted; Utility bills in spouse name may be accepted provided the passport carries the proof of same. He said that he was confident that the Government will take up this matter with highest priority.
Pravasi Bandhu Welfare Trust is an NGO registered in India on August 18, 2001 with a chapter in the UAE, primarily to focus on NRI related matters / issues. The trust conducts various CSR programs on financial inclusion activities inculcating financial discipline, saying, planning and investment habits. Pravasi Bandhu encourages GCC based NR1s to invest in Indian financial products such as Mutual Funds, shares, Unit Linked Insurance Plans, insurance, etc.
Since its inception, millions of NRIs have successfully been able to invest in India and are living out of a regular income from their savings. I take this opportunity to bring to your kind attention a few disruptions recently encountered by NRI’s since the issuance of the new CRSARSI circular. Previously, NRI Bank Statement was accepted as a proof of foreign address for KVC,