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The below content is purely for informational purposes and is not intended to constitute advisory of any kind. Please note, these are in-depth articles which are best viewed on large screen devices like laptops, desktops and tablets. The position reflected in this article has been updated as of January 15, 2024.

Prevailing Foreign Exchange Management Act (FEMA) regulations mandate that Non-Resident Indians (NRIs)/Persons of Indian Origin (PIOs)/Overseas Citizens of India (OCIs), to close all their resident savings/current accounts or convert them to NRO account.

If you have sources of income in India or you need to conduct any banking or financial transactions, you will need to hold an NRO account.

To read more about NRO accounts, click here.

Did you know?

Typically, you can convert your resident savings account to an NRO account, not to a Non-Resident External (NRE) account.

When do you need to convert your resident account to an NRO account?*

Once your resident status changes to an NRI, you will need to either close or convert your resident account to an NRO account. Under the prevailing FEMA regulations, you will be considered an NRI if:

  • You are residing overseas (except Nepal or Bhutan) for more than 182 days in one Financial Year (April-March); or

  • You have demonstrated an intent to go abroad or reside outside India for an uncertain period of time. The reasons include taking up employment outside India, carrying out business/vocation, pursuing higher education or any other purpose.

However, you are not eligible to convert your Resident Indian (RI) account to an NRO account, if you are:

  • Residing in Nepal or Bhutan

  • Travelling abroad on a short-stay visa (like a tourist visa or visa issued for family visits and business trips)

In case you fail to convert your resident savings account to an NRO account there are penalties involved, including:

  • A fine of up to three times the amount in your bank account; or

  • A fine of ₹2 lakh if the amount is not quantifiable.

Additionally, you may be subject to a penalty of ₹5,000 per day from the first day of non-compliance till the penalty is duly paid.

*Section 13, FEMA Act, 1999. 

Process and documentation for converting RI account to an NRO account

You can convert your resident account to an NRO account by:

  • Visiting your nearest branch and submitting your application with relevant documentation; or

  • Using digital channels such as your bank’s internet banking or mobile banking application to submit your request.


Did you know?

If you are a primary account holder in a joint resident bank account, where the secondary holder is not an NRI, you must inform your bank about your current residential status and promptly convert your resident bank account to an NRO account.

Along with filling the requisite forms, you would also need to submit relevant documentation and undergo a Re-KYC (Know Your Customer) process. Banks would require the following documents*.

  • Application form for converting resident Indian account to an NRO account;

  • Identity proof: Passport/Aadhaar card/driving license/Voter's ID;

  • Address Proof: Driving license, Voter’s ID issued by the Election Commission of India, proof of possession of Aadhaar number, job card issued by NREGA, letter issued by the National Population Register, Passport;
  • Passport size photographs;

  • Foreign Account Tax Compliance Act (FATCA) declaration as applicable for the United States (US) or Common Reporting Standard (CRS) for the United Kingdom (UK), Canada, or any of the 100+ countries that have adopted CRS*;

  • Permanent Account Number (PAN) card or, in the absence of a PAN card, Form 60 for opening a savings bank account. Please note, a PAN Card is mandatory to convert a resident current account to an NRO account.

*The list mentioned above is indicative and not exhaustive. These documents may differ from bank to bank. You may want to consult your bank for more details.


Once your residential status changes to an NRI, it is mandatory to either close your resident savings/current bank account or convert it to an NRO account. Your fixed and recurring deposits must also be converted to NRO deposits. Remember, if you fail to do this you can end up paying a penalty.

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Frequently Asked Questions

What happens after I convert my resident Indian account to an NRO account?

After converting to an NRO account, you can avail all the account services and benefits provided by your bank:

  • Existing funds in the resident Indian account will remain in the converted NRO account. 

  • All your current income (rental income, dividend from investments, pension, interest from Fixed Deposits (FD) and bank accounts, etc.) earned in India can be credited in your NRO account.

  • All your capital income arising in India (proceeds from maturity of FD, sale of property, redemption of mutual funds, shares) can be deposited in your NRO account.

Can I continue to use my chequebook and debit card?

Depending on your bank’s processes, you may continue to use your chequebook and internet banking credentials. However, your existing debit card would need to be replaced.

Will there be any tax implications if I, as an NRI, redesignate my accounts to NRO accounts?

Yes, upon redesignation of your resident savings account to an NRO account, interest income earned from your NRO account will be subject to tax deducted at source (withholding tax).

  • Tax Deducted at Source (TDS) will be deducted at 30% plus applicable surcharge and cess on interest earned in your NRO FD and NRO savings accounts.

  • As per the provisions of the Income Tax Act, 1961, if India has a Double Taxation Avoidance Agreement (DTAA) with the country where you are a resident, then a lower rate of withholding will be deducted, as per the respective DTAA with your resident country. This is subject to the submission of required documents i.e., a Tax Residency Certificate (TRC), an online filled copy of Form 10F and a declaration stating that there is no Permanent Establishment (PE) in India.

  • If your physical cash deposits/withdrawals in one or more accounts during the Financial Year amount to ₹2 million or more, it is mandatory to hold a PAN card.

Can I convert my resident savings account to an NRE account? 

No, typically, a resident savings/current bank account should be converted to an NRO account.

What happens to your fixed/term deposits and recurring deposits opened as a resident Indian?

Along with your resident savings account, you are also required to redesignate your resident fixed and recurring deposits to NRO fixed/recurring deposits. 


The contents of this article/infographic are meant solely for informational purposes. The contents are generic in nature and are not intended to serve as a substitute for specific advice on any matter whatsoever. The information is subject to updation, completion and verification and the applicable norms may keep changing materially from time to time. This information is also not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to applicable laws or would subject ICICI Bank Limited/its affiliates to any licensing or registration requirements. ICICI Bank Limited/its affiliates and their representatives shall not be liable for any direct or indirect losses or liability incurred arising in connection with any decision taken by any person on the basis of this content. Please conduct your own due diligence and consult your financial advisor before making any decision. Terms and conditions of ICICI Bank and third parties apply. ICICI Bank is not responsible for third party services. Nothing contained herein shall constitute or be deemed to constitute an advice, invitation or solicitation to avail any products/ services of third parties.