Why and how you should convert Savings Account to NRO Account

When a person becomes a Non Resident Indian (NRI), he is required to either close his existing savings account, or convert it to a Non­ Resident (Ordinary) or NRO account.

Most individuals make a mistake of continuing a resident savings account even after becoming a NRI but the law does not allow it.

As per FEMA regulation, when a resident’s status changes to NRI the resident savings account have to be converted to an NRO account. Or in simple words, it’s illegal to hold savings bank account for NRIs.

  • It is not possible to convert a resident savings account to NRE account as the fund source for NRE account has to be remitted from abroad.

NRO accounts can be opened with funds either remitted from abroad or generated in India.

Features of NRO account

These are just like a savings accounts, with certain restrictions on repatriation of proceeds to the foreign country.
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.

The interest will be the similar to the interest on a regular savings bank account. Interest earned on NRO accounts is fully repatriable after the deduction of taxes, as applicable.

Here’s how to convert an existing savings account to an NRO account:

Application form

Banks prescribe specific forms for the conversion of existing savings accounts to NRO accounts. Forms can be obtained from the bank or downloaded from the bank website. All holders are required to sign the form.
One form can be used to convert all savings accounts held with the bank against the same customer ID.


In addition to the above form for conversion of account type, you will also need to provide:

  • New account opening form
  • Address proof of the overseas address
  • Copy of the applicant’s passport
  • Copy of valid visa or work permit
  • OCI/PIO card (if applicable)
  • Some banks would also need 2 passport size photographs


The documents must be submitted to the bank branch. In case the customer is already outside the country, the form and documents need to be attested by the Indian embassy and sent to the branch.


After the form and documents have been received and verified by the bank, the savings account is re­designated as an NRO account.

After re-designation of resident savings account to NRO savings account, the account number will remain the same and funds from resident savings account will automatically be transferred to the NRO savings account.

However, if only NRE account is to be opened, the resident account will be closed and a new NRE account will be opened. NRE and NRO accounts can also be opened together.

If there is a Fixed Deposit associated with the old account, Fixed Deposit receipts need to be submitted along with the form. A new Deposit Confirmation Advice (DCA) would be issued to be with applicable terms and conditions.

Sources: Economic Times, Centre for Investment Education and Learning , ICICI Bank

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