It is not legal for an NRI to hold Resident Saving Account or open PPF account

Moment your residential status change to NRI, there are many rules & regulation in personal finance which get applicable to you or simply get changed. Right from your bank account to the properties you may hold, all of them have different status. Most of people tend to ignore some of them; unaware that these are illegal in laws and will attract penalties. The most basic of these is saving bank account which is the starting point and attractive investments like PPF.

Updated October 2017 – PPF Account deemed to be closed on resident Indian becoming NRI

Update 23rd Feb 2018 – October 2017 decision regarding NRI PPF is put on hold.

Here’s what the laws says and what you should do when you attain the NRI status-

Resident Savings Account

Most individuals make a mistake of continuing a resident savings account even after becoming a NRI but the law does not allow it. Or in simple words it’s ILLEGAL to hold savings bank account for NRIs. As per FEMA regulation, when a status changes to NRI the resident savings account have to be converted to a NRO account.All income which is receivable in India such as rentals from property, investments, pension etc has to be deposited in this account and any payment towards insurance premiums or EMIs on loans which you availed while in India also has to be mandated from NRO account. For this you need to inform your bank on status change within a reasonable time period.(This period is not defined but you can consider maximum 3 months)

The bank then will designate your existing resident account to NRO account and your payment will continue as it is. Alternatively, you have an option to close existing account and open a new account in case you choose to change your bank.Do remember that if you continue the resident savings account and it come to the notice you will be penalized for the same. Funds from NRO account are now repatriable upto $1millionnow but with a condition that you have obtained a certificate from Chartered Accountant for payment of taxes as applicable on your income in India. For depositing funds from abroad one will need an NRE account where there is no limit on repatriating funds back to the resident country.

It is not legal for an NRI to hold Resident accounts

All your investments and payments are linked to bank accounts. If your existing resident bank account is changed to NRO then only the status is changed. In such case you may not have to inform the respective institution. In case if you open a new account then you will have to give the fresh cheques or if it is being done through ECS then ECS mandate will have to be changed to the new NRO account. The same process will be applicable for any payout with regard to investments.

Read – Tax Planning for NRIs

PPF Confusion

PPF Update October 2017 “Provided that if a resident who opened an account under this scheme, subsequently becomes a non Resident during the currency of the maturity period, the account shall be deemed to be closed with effect from the day he becomes a non-resident and interest with effect from that date shall be paid at the rate applicable to the Post Office Saving Account up to the last day of the month preceding the month in which the account is actually closed”. (Same will apply to NSC)

PPF is a very effective savings tool for long term planning which you would have availed as resident Indian. But NRIs are not eligible to open a PPF account.However, the most unclear rules are for existing accounts. From 2003 onwards, if you have open a PPF account while you are resident Indian and then your status changes to NRI, you are allowed to continue with your PPF account. You can make contributions from NRE or NRO account. On maturity the funds will have to be withdrawn as they are not allowed for extension and the proceeds will be deposited in NRO account. Not only this, Post 2004 RBI has allowed repatriation upto Rs 1 million USD from NRO account which makes even the PPF maturity repatriable now provided the necessary rules have been followed. However, if you do not take any action for maturity, the PPF account will be designated as “extension without contribution” and will be continued in block of five years for an indefinite period. You will keep earning the interest on it. The major difference can come in the taxability. Although in India the interest is tax free and one can also claim 80C benefit from investment if there is taxable income here, but the maturity or accrued interest may be taxable in respective country where you are residing as NRI.

CheckCheapest way to send money to India

What you should do when you become NRI

If you have recently obtained an NRI status then these should be the first step for you:

1. Inform your bank that you status has changed. Approach your branch which will help you in necessary paper work for your new accounts.

2. Redo your KYC in your investments and update your accounts.

3. Reissue the cheques from new account in all your investments and liabilities. If it an auto debit then change the bank mandate to NRO or NRE account.


I have heard from our NRI clients that few bankers suggest maintaining status quo on SB account but if any liability arises they will not be there to help you. (You don’t have to be present in India to do this & can be simply done by informing bank through letter) Similarly in case of PPF one of our clients clearly asked manager of Public Sector bank that he is an NRI so can he open PPF account – manager said YES. He opened that account but now I have suggested him to discontinue that.

NRI Guide – read on SlideShare or Download it

If you are an NRI please share your practical experience with Saving Bank Account & PPF in comment section.

It is not legal for an NRI to hold Resident accounts


  1. Dear Hemant,

    NRI can open/hold/operate a domestic SB A/c now. As per RBI directive published in April 2012, an NRI can be a part of domestic SB A/c with “Either or Survivor” mandate, jointly with his blood relative or life partner IF THE LATER IS A RESIDENT.

    The above mentioned A/c can be used for any domestic transactions including PPF payments or educational loan uploads.

    I am in Muscat and in my knowledge SBI and UBI branches are providing the required A/c opening forms here itself through their channel partners.

    I have pasted the above mentioned RBI circular on my facebook wall last year.



    • Hi Rajesh,
      They can’t be first holder but you will be shocked to know almost 50% of NRIs (from my interaction with NRIs) are having resident savings account which can land them in trouble some day.

      • Hi Hemant,
        Can you please help me with “what is trouble you are referring”.. Probably some example of handling such issue.

        With Regards

  2. All NRIs should be aware of this, Hemant. When legally we can hold a domestic A/c, we should open it jointly with wife/son/daughter/father/mother/brother or sister. For PPF A/c opened earlier (before become an NRI) there is no mandate that the remittance should be through NRE or NRO A/c. PPF Amendment 44 (Section-1.c) very clearly states that an NRI can authorise a person for future remittances to avoid the closure of his PPF A/c subject to all the remittances thereafter should be from his own bank A/c (by cheque or DD). I have received a written communication from PPF authority to continue the PPF remittances from my wife’s domestic A/c AFTER INCLUDING MY NAME AS SECOND A/C HOLDER. NRI can be the second A/c holder even in a domestic recurring deposit A/c as per new directive of RBI. You can get the details of this amendment directly from RBI website. SBI main branches are displaying this circular in their notice boards. Being a financial advisor, you must have seen the downfall in SIPs when most of the NRIs turned into RDs. Banks like TMB, CSB and UBI were offering 9.5 % interest for their 10 year RDs.

    • Hi Rajesh,
      Thanks for sharing your valuable inputs – hope this will will be helpful for NRI readers.
      Can you also share some common financial misconceptions that NRIs have.

    • Hi Rajesh, I just happened to see your msg on PPF. My wife and myself both NRIs living in Muscat. We opened a PPF Account (while being NRIs) as SBI Manager said its not an issue, but later I came to know it not legal. Now, can you inform me what shall I do? If I close the PPF Account, how and when I will get back my invested amount…any idea ?

      Waiting for your comments. Thanks.

  3. I didn’t touch the core subject in above mentioned comment… Regarding PPF, actually 95 % of NRIs are not continuing with their PPF A/c now. Reason is simple: – while PPF offers less than 9% annual compounding interest, 10 years NRE RD accounts are offering 9% quarterly compounding interest.!!. The extra advantage is, maturity proceeds from an NRE RD A/c will come back to NRE SB A/c so that NO TAX LIABILITY will be there in future also. Some of the banks like Federal Bank and South Indian Bank offers RDs with monthly/quarterly/half yearly and annual instalments BUT WITH QUARTERLY COMPOUNDING interest. SBI started an innovative product called e-flexi deposit which offers the facility to deposit any amount at any time and the yield will be at the contracted rate of interest. (Earlier, only the core instalment was eligible for contracted rate of interest and the extra deposits were carrying the floating rate of interest). When we have lot of secure and liquid options available, why we should go for an old product like PPF.? After all, an NRI can not open a new PPF A/c in his name legally.

  4. Hi Rajesh,
    Thank you for the useful information. Can you please post a link for the SBI e-flexi RD? I could not find it anywhere.


    • Hai ARC, It’s e-Flexi FD scheme. You can see the ad on opening page of online sbi itself. For flexi RD scheme details visit UBI website or BOI (Bank of India) site. Some more amazing RD schemes are available with TMB website



  5. great information Sir,please paste an article on PPF in details,
    regards vinay

  6. My note here is for paying thanks to Rajesh Babu for his valuable advice on this topic. I believe, Hemant Beniwal is also agreed with the words said by Rajesh Babu..

    Thanks for keep posting the valuable thoughts and actual policies. This really helps readers to gain the knowledge on the subject.

    Thank You.

  7. If anyone need a long term investment product like PPF, please check with IDBI bank before opening the PPF A/c. IDBI offers a 20 year RD scheme with 8.5% interest (quarterly compounding) as per their new circular. May be, their branch officials may not have the complete details of this product as it’s a very new introduction; And you can mail to their customer service asking for more details. The A/c is TDS free but I am not sure whether it’s been offered to NRIs. I am too waiting for two upcoming new banks (from Reliance & Muthoot group) who offers many new surprises in Indian banking industry.

  8. I wish to say thanks to Mr. Rajesh Babu for giving us the clear picture on the NRI Investments and also to Mr. Hemanth.

    Now a days, Life Insurance cos. are asking for providing a local bank account for transferring the proceeds or maturity benefits of the policies. When I provided my NRO SB A/c Number, the Branch Manager insisted for opening a Normal SB A/c to the maturity benefits/interim payments.

    In Mr. Hemanth’s posting you have mentioned that NRO A/c can be used for payments of Premium etc., I wish to know whether NRE A/c also can be used.

    Since SB A/c Interest is Tax Free upto Rs.10000 under 80c, is it okay to maintain status quo if the Interest on such a/cs are less than Rs.10000.

    • Viswa,

      If insurance policy is denominated in forex, the premium payments will happen through NRE a/c. For ruppee denominated policies, the premiums are paid from NRO a/c.

  9. Thanks for sharing valuable information.

    I have more queries as below , appreciate if I get more information & clear direction on them.

    1. Demat Account (which is resident account)
    2. Online Trading account linked to resident account
    3. SIP in Mutual funds via ECS from the resident account.


  10. Great post. During the course of my profession, I have come across many NRIs who hold both local savings and NRE a/cs in the same bank and branch, inspite of knowing the rules!. This could either be because the process of closing the SB and opening an NRO is inconvenient, as they may have certain receipt like rental income or MF dividends being credited in to their local a/c as ECS; or they just want to avoid the higher rate of taxation applicable to NRO a/cs.
    What I find is that even the banks do not have proper checks in place and most of them do not stop the clients from maintaining a/cs under a dual status.

    • First of all, thanks a lot for the article and Rajesh thanks for valuable input.

      I learned about this after 4 years of my stay outside India and neither closed or converted my saving account.

      I had rental income and EMIs going through same account. This was pure ignorance and lack of knowledge.

      Very first step I can think is to convert status of my account to NRO.I would like to know what are penalties and process to fix this.

      I have never transferred money back, yes yes.. it’s just me.

      I didn’t have significant income and / or interest worth reporting for tax but still to clear up this mess what should be next legitimate step.

      Rajesh, can you please share the link of RBI article?


  11. My tenent last five year not paid rent left India they do not change saving A/c
    court order paid mean profit & pussion to lanlord. as per order they paid amount
    by cheuqe state bank of india local saving A/c. Not NRE/ NRO A/c do not change
    resident please halp me in my case apple in Gujarat High Court


  12. My tenent last five year not paid rent left India they do not change saving A/c
    court order paid mean profit & pussion to lanlord. as per order they paid amount
    by cheuqe state bank of india local saving A/c. Not NRE/ NRO A/c do not change
    resident please halp me in my case apple in Gujarat High Court


  13. Hi , i have a confusion , i am a marine engineer , so due to my profession, i spent more than 183 days outside india and have nri status. I hold RI account and my fds are routed through this RI , what should i do now …. all my remaining investments are through My NRE account.I used to give form 15G but since I am NRI i am not entitled to (i came to know about this later). i have around 15 L in fds.

  14. Iam an NRI holding NRE account in an new bank, but before i became i was having local savings account but i dont use that often i have that only when i visit india to use some deposits can i continue this plesae adivse… Incase i change to NRO what is the disadvantages.. I hold just a minimum balance approx 10,000 just to book tickets etc..

  15. Hi all,
    Can anyone advice me what is the procedure to convert my SB account to NRE account in IDBI bank? I want to know it is possible to convert or to open a new NRE acc by cancelling the existing SB acc.
    Shankar G.

  16. The Reserve Bank of India (RBI) has allowed non-resident Indians (NRIs) to operate resident bank accounts on “either or survivor” basis. According to RBI, banks may include an NRI close relative in existing / new resident bank accounts as joint holder with the resident account holder on “either or survivor” basis, subject to fulfillment of a few conditions.

    Such accounts will be treated as resident bank accounts and will be subject to all the regulations applicable to a resident bank account. Cheques, instruments, remittances, cash, card or any other proceeds belonging to the NRI relative shall not be eligible for credit to this account.

    Besides, the NRI relative shall operate such account only for and on behalf of the resident for domestic payment and not for creating any beneficial interest for himself. An NRI can be a joint holder in more than one account, if s/he is a close relative of all the resident bank account holders.

    If due to any eventuality, the non-resident account holder becomes the survivor of such an account, it shall be categorised as Non-Resident Ordinary Rupee (NRO) account according to the extant regulations, RBI said. The onus will be on the non-resident account holder to keep the bank informed to get the account categorised as NRO account and all such regulations as applicable to NRO account shall be applicable.

    According to RBI, the joint account holder facility may be extended to all types of resident accounts including savings bank accounts. While extending this facility, the banks should satisfy itself about the actual need for such a facility and also obtain a declaration, duly signed by the non-resident account holder, said RBI.

  17. Hi ,,
    I have a one quire regarding PPF A/C , i have opened a PPF A/C after become a NRI, i’m aware of this (mean NRI should not eligible to open the PPF A/C).

    What should i do now, shall i close the A/C? if i’m closing a A/C, can i get the invested amount in PPF A/C?

    Please help me out ?


  18. Dear Rajesh,

    Can you please re-share/attach the RBI circular (of April 2012) regarding “NRI can open/hold/operate a domestic SB A/c now”

    Thanks in Advance

  19. I have invested in various mutual funds about 10-12 years ago before I move to United Kingdom. I could redeem some of them about 6 years ago But, I could not get the redemption for quite a few Mutual Funds eventhough I have submitted after verification of signature by Indian Bank and the local branch offices of the corresponding Mutual Fund Houses, the redemption applications have not been honoured or rejected by MF houses twice. In the meanwhile my family also have moved to UK over 5 years ago. I am not sure how to redeem the mutual funds now as the redemption application requires the proof of residence like voter card, Aadhar, water bill,etc which I don’t have now. I have already changed all my SB accounts into NRO after obtaining my OCI card. I have no idea how to redeem these mutual funds. Anybody can kindly guide me? Thanks.

  20. I had been NRE for one year .I opened an NRE account and my wages transferred to same.Every month the entire salary was transferred to fixed deposits for 10 years as deposit rates are going down,thinking i can live with the interest every month. I am alone and 55 years old. i wish to know after 10 years of FD maturity can i continue with reinvestment for another 10 years and maintain NRE account .Will bank ask every year for non-residential status or KYC to prove my status?.Since i cannot work anymore and like to live of interest received from bank.

  21. Dear sir,

    1.As i have FD in saving bank in India as iam an NRE is it illegal to have this.
    2.I have submit form 15G for tax reduction also
    3.The FD amount transaction from my NRE account
    4. All confusing me i want to know any problem with FD

  22. Dear sir
    Last 2 year I am NRE and my all foriegn salary deposit in SBI saving account. Now I want to convert it into NRE account ,it is possible , if yes what about my money deposit in saving account. It will convert or I have to pay tax.. What I will do plzz suggest me.

  23. Recently I applied for NRE account in SBI . Also resident saving account to NRO. I have been maintaining PPF account for last 5 years .
    Please let me know would it be any impact on PPF deposit in future.

    Please provide your Valuable guide.

    In future if my status

      • Sir,
        I am on my husband visa. I do pocess nre account and normal resident account in different banks.
        1. Can I operate both as I am not on any employment visa.
        2. Can I start to invest in mutual fund using resident bank account
        Please reply.

  24. Sir ,
    Who is to be called NRI.? My son has gone to USA while working in Indian
    company. For the the last two years he is in USA and may another two years in
    USA. While going to USA he has taken some Housing Loan and repaying that
    through NRE account. Earlier he had Savings Bank account with the same Bank
    which is kept at minimum amount of deposit to keep that working.
    Before going abroad he had a PPF account . Now that account is maturing in
    Mar. 17. after one 5 year extension. We wish to continue for another 5 years
    extension. is that allowed? Please guide me.

    Dilip Ogale

  25. Hi,
    I am Rohit Patel, I have some confusion about my ppf account, please help me to clear it.
    First time in my life, I left India on 19 Feb 14 for employment, and Return to India for 20 days in December 2014, During this visit I had open PPF Account on 17 Dec 14. and went back abroad 22 Dec 14 again.

    Could you please tell me PPF account is legal or not?

    If illegal what should i do?

    Thank you.

    • Hi is there any one who face the any issue for withradawl for this. please share i also did the same

  26. I am a mutual fund distributor one of my nri prospect want to open demat account in India for mutual fund. he works in Saudi Arabia I took his licence, salary slip, visa copy, resident permit but non of them shows address on it. so how can i do KYC

    • Hi Rakesh,

      You can ask for his rent agreement or a letter from employer – if that’s in arabic, you can ask him to get it translated & attested.

  27. I am Ankit Shah became NRI in last year.

    I have balance in my Resident Saving Account and I want to transfer the same to my NRE Account. I have paid taxes in previous year on balances which is there in my resident account by filling return of income and declaring correct Income.

    Can you please Suggest way with link of RBI for transferring fund from Resident Saving Account to NRE Account.

    Thanks in advance Hemant.

  28. If Someone Living & working abroad but don’t send money to India. Still do he need to change the status of Saving Resident A/c in India to NRI/NRO?

    • Dear S. Kumar

      You can make him a joint holder but you have to be the first holder & his operating pattern will be on a former or survivor basis, which means that he cannot operate the account until the first holder of the account lives.

  29. Hii Hemant
    Can u please help me
    Is an NRI can open fd and sb account with his mother and brother with operating instruction Any one survivor.
    As it is not converted to NRI account. So is there any problem and NRI is the second party of that account……please answer me as soon as possible

  30. this forum is very informative and share usful information for lay people like us.
    thanking the effort .

  31. dear mr hemant i wish to know that me and my wife has Demate account since 2005 wife as first account holder.presemly wife is indian resident and will be nri after few months.what shoud be the fate of icici Demate account and fund invedted through this account.
    please guied.

  32. We(my wife & me) have recently gone to USA with immigration Visa. We are yet to get the Green Card issued. We have Savings bank accounts & FDs as Resident Indians (& no PPF account). I would appreciate if you can kindly guide me on the following:
    1. When are we to inform the Banks change our status (is there any time period like 182 days etc as defined in IT Act)?
    2. Will Banks transfer our savings account & FDs to NRO accounts if we communicate by a letter or any form to be filled up? When I enquired with Banks before leaving India they did not issue any form.
    3. Will the present FDs continued as such with the same interests or will they ask to close the present FDs & open new NRO FDs.?
    4. With income from present FDS (no other income) our income will belower than the threshold taxable limits. Hope there would not be any change.

  33. i have a NRE FD jointly on Either or Survivor basis with my wife. I am the first account holder and my wife the second account holder. However,my wife has recently become a resident after she moved back to India. Would I need to do anything since she has now become a RESIDENT??

  34. Hi,

    Iam currently an NRI.I am having a NRI account in SBI,and in same bank branch I have S/B account also.If I convert to NRO is it taxable.My salary which is in dollars will be converted to INR and comes to my NRI account,I can withdraw same using ATM,Cheques,e.t.c. But I cant deposit same back to NRI account.simply,If I takes 1 Lakh INR to give as credit to some one and when that person gives the same amount back,Where I can deposit that back ? ,if the same is deposited in NRO account with PAN details is it taxable ???

    • You may opt for getting the money back from person by cheque. Assuming that, its small amount and also you do not have any other source of income in india, it wont attract any tax.

      As such, it is better that any help / loan to families , frnds can be done by issuing cheque not by cash.

  35. Hi,

    Thanks for such informative article.

    I am NRI since 10 years and hold NRE account in SBI. Recently my wife has joined me in overseas. She was holding SB account in SBI since he school days. Now since last 1 year she is with me. Is there any need to convert her account from SB to NRO? She is homemaker. Any amount transferred to her account is from my NRE account.

    We also have joint account in SBI. Is it necessary to change the status from SB to NRO?

    Kind regards

    • Dear Sarveshkumar,

      As your wife is with you in overseas since last 1 year she has now became NRI. So as a NRI it is illegal to have a SB account. You should convert her SB account as well as your joint account with her into NRO account.

  36. Sir the last 8 years am living abroad but i hold saving a/c ihave no source of income from India. I have send all money in my domestic a/c . But can i do to convert my hard earned income in nre a/c. Because in nro a/c i have to pay heavy tax.

  37. Sir,
    Myself and my wife are NRIs since 10 years. My wife is a homemaker. She has an SB account and a Demat account respectively but no income in India except the dividends which is below the tax threshold. From your posts, I understand it is not legal to keep SB account by NRIs. Could you please let me know will it attract any penalties?

  38. Hi Hemant,

    I am NRI working outside India while my wife don’t have a income in India or abroad. She stays with me. Please help to advise :
    1. Since she is not earning abroad, can still open her PPF account and fund it through my NRI income ?
    2. Do I need to open a seperate NRO account for her since she is an NRI ? Or Can she keep Saving Bank account in India ?

    Thanks for your help.


  39. Great post, Hemant. I think it is a great idea to open a PPF account before the status changes to an NRI as you can then keep investing to build up a corpus and then later decide to repatriate if you are going to stay overseas or use it in India when you get the lumpsum amount.


  40. Hi!
    My daughter is staying abroad for education for the past 5 years. She holds a saving a/c jointly with me (either or survivor) and a few Fixed deposits -again jointly with me.
    Kindly advice whether we should get the savings as well as fixed deposit accounts closed or converted to NRO. My daughter does not send any money to India.

  41. Good informative article and discussion.

    I am a NRI in US. Recently my father expired and now have FDs and money transferred to my name because I was the nominee. I am trying to open NRE and NRO account. My question is :

    How much tax will i pay on the FDs and money in coming financial year if I move all this to NRO account. I know NRO is taxed at 30% flat but I read somewhere it will be 15% in case you are in US not sure how accurate thats why confused.

  42. Hi

    I am at Japan since 1 year and we got Indian salary and also we have fill the form 16 every yesr for indian salary, so it is necessary to convert my account at AXIS Bank,SBI,Icici Bank and Post office to NRO account.It is posible to take home loan at India from SBI.Please suggest.

    Thanks Manish

  43. Dear Sir,
    About 8years before, my son had started business in India, he has investment in shares, mutual fund, fd ppf a/c insurance policy, ulip policy, rental income from property . He has been filing income tax return. His investment is being done from his savings bank a/c. For business purpose he had opened current a/c also. He went out of country for further studies, and his father is taking care of his business. since he had gone for studies, due to lack of knowledge, that if, a person is out of country for more than 180 days, he is considered as NRI.we did not declare him as NRI, as we were thinking that after studies he will come back and look after his business, he has completed his studies and got temporary visa and working there and paying tax also. since he does not have permanent visa , he is still not sure wheather, he will be getting pr or he will have to come back, after expiry of visa. In this case, what about his business, do we have to close. and what about his savings bank a/c current a/c and other investments and specially ppf a/c which was opened long before he left for studies. though his indian business is still existing. does he need to open NRO A/C or change s/b a/c into NRO A/C., He has not remitted any money in any of his account or our account except once on our wedding anniversay as a gift, he does not have NRE A/C either.
    DECLARING himself as NRI and converting S/B A/C into NRO A/C will be enough or there are more formalities to be completed. what is the procedure? pls suggest legitimate steps so that we do not fall under any trouble due to ignorance.

  44. Sir
    I want to know about of Fixed deposit. I am employed in Oman . My saving account
    of India become NRO . my FD is about 10 lacs . can I submit 15G form for not deduct for TDS ? If 15g form not submit than how much tax deduct .

  45. On one hand Indian government says NRIs with OCI will be treated equally in all financial matters, on the other side they are not given senior citizens interest benefits in bank accounts like the domestic accounts. What is your opinion in this regard? Hope to get reply soon.

  46. Hi,

    I came to USA in Jan 2017. I have a saving account in ICICI bank. I am currently not working as I am on H4 visa. What should I do?
    Will I need pay taxes if I convert my account to NRE.
    Also I had ppf account opened before moving to USA, I hope that wont be a problem. 🙂

    • Hi Namrata,

      There will be no tax if you convert your saving account to NRE account & you can continue your ppf account. But I have no idea how US tax department will treat interest earned in India.

      • Hi Hemant,

        Thanks for this knowledgeable article and comments.
        1) Can I convert my savings account to NRE? (In the above article it states we need to convert it to NRO). If possible please shed
        some light on differences between NRE and NRO account.

        2) If I transfer my income earned aboard to NRE account and make FD of it. How much tax do I need to
        pay on the interest earned? Will that tax be deducted at source or I
        will have file IT return for that.

        3) If I invest my income earned abroad in Shares/Mutual funds in India. What tax rules will be applicable in that case?

        I really appreciate your help in understanding these taxation rules.

  47. I am a new NRI in USA under dependent GC visa. I am not earning in USA. I have converted by Domestic Account to NRO in Aug 2017. I have FDs opened as Resident & these are maturing in Dec 2017. I was told the existing FDs (opened as Resident) can be continued till its maturity. Will I get the contracted interest rates(including the additional 0.5% for senior Citizens: I am being a Senior Citizen) for my FDs till its maturity? If there is any circular by RBI kindly help with its reference.

  48. i am NRE account holder , i am leaving braod , i do send money to my NRE Account . so do i have pay taxt to indian bank ,
    if i move india to india doing work or small bussines in india my NRE acount will after to any rule in india because i am british passport holder .
    please any body help with this issue

  49. Sir
    Now a day’s I am receiving dividend warrants physically. Though at DP bank details are provided companies send message that banks have rejected repayment. Pls suggest me how to get ECS done being NRI.

  50. Hello Friends, please tell me about this matter
    Canadian Resident (one who is never been a resident of India) can able to deposit Rs. 1,50,000 to his Indian Friends A/c (One who is living in India and having a Account in SBI Bank in India). Can Canadian Resident able to deposit amount as he wish to his Friends SBI SB A/C in Indian Bank in India.

  51. After reading all the comments it is still not clear whether a NRI can continue having a resident savings account.One expert threatens of severe penalties whereas the other says one can hold the SB account along with a relative in India.
    Same with PPF account.I was informed by another expert once that one must close the PPF account after one acquires the status of NRI.when the five year block period is over otherwise one will not get the accrued interest that one gets beyond five years.
    What is one 1to believe?

    • Hi Soli,
      Happy Diwali.
      Last week I attended training on NRI taxation.. I discussed these points.. he agreed with the content of this post ?

  52. PPF Update October 2017 “Provided that if a resident who opened an account under this scheme, subsequently becomes a non Resident during the currency of the maturity period, the account shall be deemed to be closed with effect from the day he becomes a non-resident and interest with effect from that date shall be paid at the rate applicable to the Post Office Saving Account up to the last day of the month preceding the month in which the account is actually closed”.

  53. I have a dependent visa for Oman. Can i continue my resident account or do i have to convert it into NRO account? I dont have any income from abroad. What should be done with the ppf account that i opened before moving abroad?

    • Hi Harsha Ji,
      You have to convert sb to NRO.
      You to inform post office or bank for PPF – now onwards you will get SB interest rate on the balance.

  54. What if an Indian National has already opened a PPF account 2 years back and later became an NRI?
    Can he still keep PPF a/c under the provisions of recent notification dated 3/10/2017.
    Please guide. Regards.

  55. In 2005, I opened up a PPF account. I am depositing money into the account since then. Subsequently I started working abroad on contractual basis thus maintaining NRI status Kindly request you to advise on below queries.
    1. In 2005 I was a resident indian. How can I prove this. I had a passport then but it was cancelled as hand written and lost somewhere as new passport was issued.
    2. It is noted as per latest PPF notification in Oct 2017, that NRI will get only post office saving ac interest rate. How do I notify bank that I am an NRI now.
    3. Since i will return to india after a few years and would again be a resident indian. Can I continue the same PPF account and avail complete benefits then?

  56. Hi Hemant,

    I had opened a PPF account while i was a resident Indian in 2004. However, I have been an NRI since 2007. I’ve made annual contributions to my PPF a/c all these years and the PPF a/c is about to mature in 2019.

    The matured amount from the PPF a/c was supposed to go into a linked Resident Savings a/c which i have recently converted into a NRO a/c. Will the PPF a/c be impacted in anyway if I let the PPF a/c mature as per status quo since there is just about one year left for maturity?


  57. I have just got my Oci . I have savings acc in the banks. What should I do if I want to close
    my accounts ,I do not have, an adhaar card, can I close my savings accounts? Or do I need to convert my acc to NRO and then close. Please let me know the procedure. Thank you

  58. Hell0
    One of my friend is foreign nationalty. Has studied in India & also holds OCI card.Their parents are Indian.
    At present he works in abroad,can he open ordinary Indian savings account. (Normally like indians) or he has to open NRO account. Pls help me.

  59. My friend holds resident Bank SB accounts, FDs, PPF whose all installments have been paid. But he has not declared his NRI Status since 2007. How should he normalize the holdings in India? How to close the bank accounts, FDs, PPF etc ? What to do with the maturity proceeds? How about FATCA/FBAR etc?

  60. Hello,

    What happens to ones employees provident fund account (EPF account) if a resident indian becomes an NRI. Does it necessary to convert to NRO account ?

  61. Hement,
    We understand that RBI allows a NRI to operate a normal saving account if he is joint holder with a resident indian & close relative only.

    If above is true, my query is who will be the first holder RI or NRI ? I

  62. Hello sir
    My queries are
    1.Can we convert a NRE account to NRO account?

    2.can a NRI hold multiple NRE accounts ?

    Thanks and regards

  63. Hello Sir,
    Presently I am working in middle east and opened a resident savings account in my name after becoming NRI as i was not aware that NRIs can not maintain resident savings account and even bank did not inform me about this knowing that i am staying abroad. I had remitted money to this account and made an term FD .When requested bank to convert this account to NRO,bank is saying that it can not be done and i have to close FD and account both and new NRO A/C to be opened and i have to physically present there to close this account.However i have written mail to bank manager for conversion stating if documents could be sent via courier but there is no reply since 3 week.Even i am not in a position to visit india till next two month due to heavy work load .Will there be any penalty ?Kindly suggest what to do ?

  64. Hello Sir,

    Could you please give me your opinion about my situation?

    I am an NRI for the last four years. Next year I am coming back to India on a leave for two years. My company will issue me a letter stating that I am on parental leave without pay and I will join the company again after two years. This means I have still the employment contact with the company.

    Now my question is if i need to close my NRE accounts in India or can I maintain the NRE accounts because under FEMA I am not returning to India permanently. During these two years, I won’t be doing any job or business in India.

  65. Hello,

    My son is a student in USA with F1 visa since 2012. He now visits India only once in a year for 3 weeks. He has a PPF a/c here with BOI much before 2012. His PPF a/c expired on 31st March 2018. What should he do ? Can he continue the PPF a/c ? If so, is it necessary that he makes contribution from his NRO a/c only OR I can make contribution from my savings a/c ?

    Secondly, if I transfer money (upto US$250,000 per year) from my savings a/c into his NRO a/c as Gift, can he later gift the entire or part of the money back to me as Gift from his NRO a/c to my savings a/c ?

    Can I open a Demat a/c here in my name as first holder and him (an NRI with F1 visa) as second / third holder with shares market value more than US$50,000 ? The bank account for dividend income / sale proceeds will be my savings a/c.

  66. Dear Sir,
    One of my relative became non resident in 2014 . He left the company in which he was working after about 13 years in August 2018. For the period from 2014 till August 2018 he contributed to his PF from his overseas salary.
    Recently the company has paid his accumulated PF and Gratuity amount and deposited in his salary account which is now a NRO acc.
    Can he convert this amount into his NRE account.

  67. Hello sir,

    What one should do if missed to inform bank about converting resident account to NRO and income earned from abroad was transferred to resident saving account?

    • Hello Sir,

      I am working abroad past 15 yrs and have having an NRO account with HDFC bank. What about the resident savings account in India. Do we need to change the status and inform the Bank ?

      How do we file returns for AY 2019-20 with current NRO account and resident savings account

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