IFSCA’s Video KYC Framework for Indian Nationals and NRIs in GIFT CITY

V-CIP (Video-based Customer Identification Process) is a regulatory-compliant digital method for customer onboarding using video interaction instead of physical KYC verification. It enables regulated entities (REs) to complete identity verification using Aadhaar, PAN, or OVDs via video calls — with proper liveness detection, geo-tagging, and encryption.

The V-CIP framework forms part of the IFSCA (AML, CFT & KYC) Guidelines, 2022, designed to safeguard financial integrity in India’s International Financial Services Centres (IFSCs) like GIFT City.

💡 Why Was V-CIP Introduced?

The primary objectives of Video KYC for NRIS in gift city:

• ✔️ To digitize the KYC process while remaining compliant with global FATF standards

• 💻 To support digital-first onboarding for Indian nationals and regulated entities in IFSCs

• 🌍 To improve ease of doing business for fintechs, banks, and capital market intermediaries

• 🚀 To lay the foundation for global access to Indian financial products via GIFT City

🌐 What’s the Issue? Why a Consultation Paper?

❗Current Limitation

While V-CIP currently allows resident Indian nationals to be onboarded, connections from IP addresses outside India are restricted. This has:

• Blocked NRIs from being onboarded digitally

• Increased onboarding friction for global investors

• Reduced GIFT City’s effectiveness as a truly global IFSC

  
  

📑 Proposed Change by IFSCA in Video KYC for NRIS in gift city

IFSCA has released a Consultation Paper (July 10, 2025) proposing to modify Part-A of Annexure II of the AML-KYC Guidelines to allow onboarding of NRIs via V-CIP, initially for low-risk customers from select jurisdictions like:

• 🇺🇸 United States

• 🇯🇵 Japan

• 🇦🇪 UAE

• 🇰🇷 South Korea

• 🇸🇬 Singapore

• 🇬🇧 United Kingdom

• 🇨🇦 Canada

These modifications would be supplemented with enhanced due diligence and additional safeguards.

🛠️ How Does V-CIP Work?

✅ For Indian Residents (Current Process)

1. Customer initiates a secure video session.

2. Official verifies:

   • Aadhaar (offline XML or QR)

   • PAN via Digilocker

   • Face match using AI tools

3. Checks include:

   • Liveness detection

   • Geo-tagging

   • IP location validation

4. Video is encrypted, recorded, and stored.

5. Account is activated after internal approvals.

🔜 For NRIs (Proposed Process)

• Must be low-risk individuals.

• Must have valid current address proof from eligible countries.

• IP address may be allowed from outside India with verified source/location.

• Additional safeguards will apply.

📬 Public Feedback Open Till August 1, 2025

IFSCA is currently seeking public comments on this proposed modification.

• 📩 Email: aml-cft-div@ifsca.gov.in

• 📌 Subject Line: “Comments on draft modification to Part-A of Annexure II of the IFSCA (AML, CFT and KYC) Guidelines, 2022”

• 📅 Deadline: August 1, 2025

• 📄 Format: MS Word or Excel

• 🔗 Official Draft Link

✅ Advantages of V-CIP

1. 🧠 Faster Onboarding – Avoids physical KYC delays

2. 🌐 Global Access – NRIs and diaspora investors can access IFSC services

3. 🔒 Secure & Verified – Liveness, AI-based verification, encrypted data

4. 💸 Lower Costs – Saves manpower and branch costs for REs

5. 📈 Enables Fintech Innovation – Supports agile, digital-native platforms

❌ Disadvantages & Concerns

🔴 Challenge	⚠️ Impact
Limited to low-risk customers initially	Slower scaling
Internet + device requirements	May exclude tech-illiterate users
Potential fraud risk from spoofed IPs	Requires strict geo-verification
Aadhaar-only reliance	Excludes non-Aadhaar holders, foreign nationals
Compliance burden	Needs trained officials & audits

🧭 What Happens Next?

• Post-August 1, IFSCA will review all stakeholder feedback.

• Final notification will modify the V-CIP framework to formally include NRIs from approved jurisdictions.

• Additional guidelines on data storage, official training, and eligibility screening are expected.

🗣️ Final Thoughts

IFSCA’s proposed update to the V-CIP onboarding for NRIs is a critical regulatory milestone in making GIFT City a truly international financial centre. Stakeholder feedback will help refine the framework, balance innovation with integrity, and open doors to global retail and wealth investors.