When you leave India to settle abroad, there are plenty of factors you need to take into consideration, especially when it comes to your financial requirements. One factor you need to consider is that your current funds are secure, and accessible, especially when you travel abroad. While the country you may be travelling to will have their own laws regarding their banking, you will need to adapt to their new environment without losing control over your own finances.
Keeping this in mind, here are a few steps you can take:
Update your bank account: If you have any bank accounts in India, it is only meant for resident Indian. Therefore, when you travel abroad, your residency status will change. This, in turn, will affect your ability to hold a resident bank account. You will need to change your resident accounts into any of the NRI accounts namely the NRO or the NRE account. Each of these accounts has different properties and functionalities. For example, the NRO account allows you to hold income accrued from India and will pay interest on your investment. On the other hand, the NRE account can be used to repatriate funds without any limitations. Additionally, rupee currency can be invested in this account.
Manage your investments: You will need to take stock of all your investments before moving out of India. Before you do so, you will need to make a decision about the investments you want to hold and which you wish to liquidate. For example, if you have a demat account, you will be required to relinquish your hold on the account. You can even open a portfolio investment scheme where you can transfer all your holding before you get your NRI status. If you cannot make these decisions on time, you can appoint someone and give them a power of attorney to act on your behalf and execute your transactions.
Update your KYC status: It is crucial that you update the KYC status for every financial product your hold. This can include bank accounts, insurance policies and mutual funds. Once you leave the country and settle abroad, your address and residency status will change, and therefore, you will need to update your KYC.
Evaluate and update your insurance cover: Before you change your status to an NRI, you will need to ensure that all is covered in your health insurance policy, especially outside the country borders. While health insurance companies allow treatment within the country, it would also include medical treatment abroad. However, you will need to evaluate your cover size and increase it before you change your residency status.
Debt management: As far as possible, try and close all existing debts before you shift to another country. If you have any outstanding loan balances after shifting, you can try for timely repayments from your NRO or NRE account. You can appoint a POA to manage your debt, as it will help you immensely after you leave the country.