India’s financial markets have taken a major digital leap. Kotak Mahindra Bank has issued the country’s first fully digital Foreign Portfolio Investor licence. The entire process, from application to approval, was completed online using electronic signatures. This move highlights India’s growing focus on ease of doing business, faster onboarding, and attracting global capital through technology-driven reforms in the financial sector.
Kotak Mahindra Bank Digital FPI Licence
- The development is in news after Kotak Mahindra Bank became the first custodian in India to issue a fully digital FPI licence.
- The bank completed the entire account-opening and licensing process through digitally signed documents, without any physical paperwork.
- As per the bank’s statement, two FPI licences have already been issued using this digital route, marking a milestone in India’s capital market infrastructure.
What Is an FPI Licence
- A Foreign Portfolio Investor (FPI) licence allows overseas investors to invest in Indian equities, bonds, and other securities.
- FPIs play a crucial role in providing liquidity, improving market depth, and supporting capital formation.
- Traditionally, FPI onboarding involved extensive documentation and time-consuming processes.
- The move towards a fully digital FPI licence significantly reduces delays, costs, and compliance burden, making India a more attractive destination for global investors.
Role of SEBI’s Unified Digital Workflow
- The breakthrough follows reforms by Securities and Exchange Board of India, which operationalized a unified digital workflow in January 2026.
- This framework allows custodians, depositories, and intermediaries to process FPI applications end-to-end online.
- Kotak Mahindra Bank is the first institution to fully utilise this system, setting a benchmark for other market participants.
How Digital Onboarding Benefits Foreign Investors
- The digital FPI onboarding process improves speed, transparency, and compliance.
- Overseas investors can now complete licensing remotely using electronic signatures, eliminating physical submissions and courier delays.
- Faster onboarding means quicker access to Indian markets.
- It also aligns India’s regulatory systems with global best practices, especially in major financial hubs where digital investor onboarding is already standard.
Impact on India’s Capital Markets
- The launch of a fully digital FPI licence strengthens India’s image as a modern, investor-friendly market.
- It supports the government’s broader push towards Digital India and ease of doing business.
- Over time, this reform is expected to increase foreign portfolio inflows, improve operational efficiency for custodians, and enhance India’s competitiveness among emerging markets.
Question
Q1. Which bank issued India’s first fully digital FPI licence?
A. SBI
B. ICICI Bank
C. HDFC Bank
D. Kotak Mahindra Bank