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I moved from India to the USA about six months ago for work and have now been treated as an NRI for banking purposes. Before moving, I had a normal resident savings account with an Indian bank, and I still use that account for some of my existing payments in India.
I recently read that when a resident Indian becomes a non-resident, the existing resident savings account should be redesignated as an NRO account. RBI guidance says that when a person resident in India leaves India for employment, business, vocation, or another purpose indicating an intention to stay outside India for an uncertain period, the existing account should be designated as an NRO account.
My confusion is about the practical process. Can I simply continue using my existing resident savings account until the bank contacts me, or am I supposed to inform the bank and convert it myself?
I also have some questions about what happens to the balance already in the account. Does the existing balance automatically become NRO funds when the account is redesignated?
I have heard that an NRO account can be used for Indian income and expenses, while an NRE account is generally used for eligible foreign earnings. I'm trying to understand whether I should have both accounts rather than just converting my existing savings account.
Has anyone recently gone through the process after moving abroad for work? How did your bank handle the conversion, and were you asked for your passport, visa, overseas address or other documents?
I became an NRI after moving to the UK, and my experience was similar, although my bank's procedure was mostly online.
The important distinction for me was between resident savings, NRO, and NRE.
My old resident savings account was converted to NRO. I didn't have to close the account and open a completely unrelated account from scratch.
The RBI's current FAQ on accounts in India by non-residents says that when a resident Indian becomes a person resident outside India, the existing resident account should be designated as an NRO account.
I then opened an NRE account separately because I wanted an account suited to eligible overseas earnings.
One thing I'd recommend is not moving all your money around before speaking to the bank. First, ask them how they want the existing resident account redesignated and how they want the existing balance treated.
Also, don't confuse becoming an NRI for tax purposes with the FEMA/banking rules. The bank will determine the applicable account-status requirements based on your FEMA residential status.
I went through this when I moved to Canada for work.
I initially thought I could leave my old savings account unchanged because all my money in it had been earned while I was living in India. My bank explained that the issue wasn't simply where the existing money came from. Once my residential status changed under FEMA, the resident account needed to be redesignated as an NRO account.
That is also what RBI's guidance says: when a person resident in India becomes a person resident outside India in the circumstances covered by the rules, the existing resident account should be designated as an NRO account.
My bank asked me to submit updated KYC/residential-status documents. The exact list can vary between banks, so I wouldn't assume that another person's checklist will be identical.
After conversion, I kept using the NRO account for things like payments and income arising in India. I also opened an NRE account separately for eligible foreign earnings.
I'd contact your bank rather than waiting for them to discover the change during a later KYC update.
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I had a slightly different situation because I had already been living abroad for a while before updating my Indian bank accounts.
My bank told me that the resident savings account shouldn't continue as an ordinary resident account once I became a person resident outside India. RBI specifically provides for redesignation of the existing account as an NRO account.
The NRO account is still a rupee account and can be maintained as a savings account. RBI's account framework allows NRO accounts to be maintained in savings, current, recurring or term-deposit forms.
For anyone in this situation, I'd contact the bank's NRI department and ask:
The exact bank procedure can differ, so I'd follow the bank's current NRI conversion process rather than relying entirely on an older forum post.