With the change in the global scenario, plenty of NRI’s are now returning to their home country in order to pursue better ventures. But while the change in status from NRI to a resident may seem like a simple process, it bears a great impact on the financial investments, especially in terms of the NRI account. After all, all NRI investments made globally have been formulated in terms of the global financial market rules and performance, which is completely from the residential functioning.
So what exactly happens to your NRI bank account when you return home? Here are a few changes that will occur:
NRE/NRO/FCNR account: These are the first NRI accounts that will change. If you have any of these accounts, you will need to inform your holding bank of the change in your NRI status and so that they can begin the procedure to convert the NRI bank account into the local bank account. In this way, all your holdings can be still held in your account, without the need to transfer them into another account. Furthermore, you can also enjoy the benefits of the local banking accounts.
RFC account: If you don’t wish to convert your NRI account or accounts into the resident account, you also have an option to cover the account into a Resident Foreign Currency account. This is normally the option for the NRE and FCNR account. Individuals who have been an NRI for a continuous period of not less than 1 year, and have become a resident in India as per FEMA Act on or after April 18, 1992, can open RFC account. However, the RFC account can only be denominated in any freely convertible foreign currency.
Through this account, you can maintain the funds in foreign currency. Moreover, both the principal and the interest rate can be repatriated back home.
The process to change the designation:
Step 1: Fill out the form updating status: You need to first inform the bank of the change in your status. The banking institute will provide you with a form asking for the details of your status.
Step 2: Provide details pertaining to KYC documents: In addition to submitting the document, you will also need to submit relevant details pertaining to the KYC documents. Banks normally request for the KYC documents in order to update your profile in the bank accounts.
Step 3: Attestation of documents: Before you submit the documents to the lending bank, you will need to get the relevant documents attested by a recognised government institute. Once the documents have been attested, you can send in the document along with the relevant forms.