‘Allow NRIs to open demat accounts online’: Zerodha’s Nithin Kamath’s pathbreaking pitch to FinMin
Zerodha co-founder Nithin Kamath on Tuesday said Ministry of Finance should boost Indian markets by making opening of demat accounts less ‘cumbersom’ for non-resident Indians (NRIs).
“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,” said Kamath in a Twitter thread.
While referring to the retail participation being witnessed in India since Covid lows of equity markets in March 2020, Kamath said “online onboarding” is needed for NRIs too.
“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,” tweeted Kamath.
He further broke down 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. 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 NRIs are among the wealthiest outside India. We need to make it easy for them to invest back home.”
The National Payments Corporation of India (NPCI) has announced that Non-Resident Indians (NRIs) holding bank accounts in India, but using international mobile numbers, can now make UPI payments. In a circular, NPCI, which oversees UPI payments and developments, stated that account holders with international mobile numbers from ten countries would be able to transact. These include Singapore, Australia, Canada, Hong Kong, Oman, Qatar, the United States, Saudi Arabia, the United Arab Emirates, and the United Kingdom.
Recently, Zerodha announced that its net profit doubled to Rs 2,094 crore in FY22. This was 82 per cent up compared to Rs 1,112 crore in FY21. According to the company’s regulatory filings with the Ministry of Corporate Affairs, the Kamath brothers-founded company also saw its operating revenue surging 82 per cent to Rs 4,963 crore in FY22 compared to the year-ago figures.
