At a certain time, several non-resident Indians plan their journey back to India. It may include various reasons, such as a career switch, family emergencies, or any other situation. There is no doubt that it is bliss to return to one’s home country. However, before you finally decide to move back to India, you must be aware of certain financial formalities, including mandatory account conversions, taxation updates, and other account-related formalities. One such financial compliance for a returning non-resident Indian includes switching their NRI bank account into a resident savings account.
Therefore, once your residential status changes, which you can check using the Belong Residential Status Calculator, you must convert your NRO or NRE account into a resident savings account. This article will help you learn how to switch your NRI account to a resident savings account.
Conversion Of NRI Account Into A Resident Savings Account: Importance
When planning to return to India, each non-resident Indian must first perform the crucial financial task of converting their bank accounts into resident accounts. As mentioned in the FEMA regulations and RBI guidelines, it is essential for non-resident Indian to redesignate their NRO or NRE account upon a change in their residential status. In case a non-resident Indian fails to fulfil this mandatory task, they might face consequences such as frozen accounts, compliance issues, or challenges with income tax filing.
Converting NRI Account Into A Resident Savings Account: Step-by-Step Guide
As a nonresident Indian returning to India, you can follow the simple steps below to convert your NRO or NRE account into a resident savings account.
Step 1: Inform your bank about your residential status
The first step in the account conversion includes informing your bank about a change in your residential status. Banks need to implement this update to align with the RBI guidelines. Hence, to notify your bank about your status change from non-resident to resident Indian, you can do any of the following:
- Visit the bank branch
- Send an email to your RM/Bank
- Use online banking
Step 2: Fill out the account conversion form
After informing your bank about a change in your residential status, you are required to fill out a resident account conversion form. This form represents your formal request to convert your present NRO or NRE account into a resident account.
Step 3: Fulfil the documentation requirements
Along with submitting the account conversion form, you must also provide the KYC documents to show your address and proof of identity as a resident. Therefore, you must submit the following documents to your bank for an account conversion:
- Correctly filled account conversion form
- Status change declaration
- Identity proof
- Indian address proof
- PAN card
- Self-declaration of FATCA/CRS for US-Canada NRI only
- Joint holder undertaking
Step 4: Process of account redesignation
Once a non-resident Indian submits all the needed documents and information, the bank starts processing their request. Their account will be changed from an NRO/NRE account to a resident savings account. Although the account number, existing chequebook, and Internet banking login will remain unchanged, the account status, type, and NRI account interest rate might change upon account conversion.
Step 5: Updated resident account features
After your account gets converted, it functions as a regular savings account. The bank will then issue a new domestic debit card to the account holder. Moreover, you don’t get interest rate on NRI account anymore and your NRI account is converted into resident savings account.
Step 6: Account conversion confirmation
Once your account gets fully converted, the bank will notify you. Post that you can start doing regular day-to-day transactions.
Conclusion:
The process to convert your NRE or NRO account into a resident account is simple and straightforward. However, each non-resident Indian moving back to India must remember that it is a mandatory task and cannot be ignored or avoided. Make sure that you follow all the necessary steps and guidelines when converting your accounts into a regular savings account.
