Can you convert your savings account to an NRE account

If you’re an NRI who has recently moved abroad or planning to move soon, then you must be aware of the regulations related to your bank accounts in India. As per the Foreign Exchange Management Act (FEMA), it is illegal for NRIs to continue holding a resident Indian savings account once their status has changed to NRI. This is why it is essential to convert your resident account to an NRO account as soon as possible to avoid any penalties or legal hassles.

What is an NRO Account?

An NRO (Non-Resident Ordinary) account is designed for NRIs to handle their savings or income received in India. This account allows you to receive money in both Indian and international currency, but the funds are stored in Indian currency and cannot be freely repatriated into any foreign currency.

How to Convert a Resident Account into an NRO Account?

To convert your resident account into an NRO account, you need to follow a few steps:

1. Download the standard request letter from your bank’s website for converting resident Indian savings bank account into NRO savings bank account on change of residential status.
2. Fill up the form and sign it along with all the account holders.
3. Post or courier the form along with supporting documents such as a self-attested PAN card or Form 60 (in the absence of PAN), self-attested copies of passport and visa to prove your NRI status, and a self-attested address proof (any one Indian or Overseas proof) as per the list of acceptable proofs.
4. If you’re a joint/second holder in Resident Account, then you need to submit a declaration along with the above-mentioned conversion forms and KYC documents.

Documents Required for Conversion of Savings Account to NRO Account

Here’s a list of documents required for the conversion of savings account to NRO account:

1. Resident to NRO Conversion form. (Form to be signed by all holders)
2. Self-attested PAN Card or Form 60 (in the absence of PAN)
3. Self-attested copies of passport and Visa to prove his/her NRI status.
4. Overseas address is mandatory to obtained from the customer and mentioned on the account conversion form.
5. Self-attested Address proof (Any one Indian or Overseas proof) should be as per the list of acceptable proofs.

Penalties for Not Converting Savings Account to NRO Account

According to the DBS Bank website, “Continuing to hold your resident savings account after gaining NRI status is considered illegal under the Foreign Exchange Management Act (FEMA) guidelines, and doing so may attract hefty penalties. Under the Act, any individual who fails to adhere to the guidelines is liable to pay a penalty of up to 3 times the amount involved in the existing resident savings account or Rs 2 lakh when the sum is not quantifiable. Additionally, a penalty of Rs 5,000 is to be charged every day from the first day of intervention until the penalty is paid.”

It is essential to convert your resident account to an NRO account to avoid any legal issues and penalties. You can contact your bank’s customer care or visit the nearest branch for any assistance related to the conversion process.

If you need any assistance related to the conversion process or have any doubts related to NRO accounts, book an appointment with WealthMunshi by visiting https://wealth-wealthmunshi.zohobookings.in/#/customer/wealthmunshisbusiness or call us at +9193979 98765. Our expert financial advisors can guide you through the entire process and help you make informed decisions.