When you change your residency status to NRI, a lot of things happen in your life. A new set of rules governs your finances, from your bank accounts to your property holdings. Closing bank accounts is usually the last thing on anyone’s mind when they have a lot on their plate. You create new accounts with local banks after relocating to a new nation. In most cases, your INR accounts are left untouched. To streamline things, you can consult NRI tax planning firms in India.
You go to the bank’s website to look for ways to close the account, but it’s useless. You attempt to close that account by chatting with your branch. That doesn’t help much either. In most cases, you’ll be asked to convert those accounts to NRO/NRE accounts. You usually give up after some research, and your account becomes dormant.
Here are a few suggestions for making the process easier and more efficient. To begin, here are a few questions:
- If you leave the country, do you have to close your account? The answer to that question is a resounding ‘no.’ You can live in one country while maintaining a bank account in another. You must notify the bank of any changes in your address, following which the bank will request that you convert your account from INR to NRO/NRE
You would be in breach of the RBI’s FEMA laws if you continued to operate a regular savings/current account while living outside the country. Simply put, the RBI wants to keep track of all the accounts into which money is being repatriated.
- Is it possible to close your bank account online? Unfortunately, there isn’t a simple answer. With the ongoing pandemic, a few banks have begun to use digital communication methods. We know that digital KYC verification works effectively for account establishing and updating, so we’re hopeful that it will function just as well for account closure. If that fails, there is a shortcut that should work with the majority of private sector banks.
You might have your INR account converted to an NRE/NRO account first and then ask them to cancel it after a few days.
- What happens if your bank account isn’t closed? As a result of your inaction on these accounts, there are two consequences:
You’d be breaking FEMA rules, and you’d be paying extra fees to keep this account open.
Many of us do not want the account to be closed for the simple reason that dealing with the bank for closure is difficult. There are really simple ways to keep your account active with no work if you are looking for ways to do so. These would necessitate almost no work on your part: For some of your recurring payments, link your bank account (EMI, rentals, etc.). Invest from your account in a fixed deposit, and regular interest payments will keep your account active. At least once a year, debit/credit a small sum. You can take regular advice from NRI investment consultant India for mapping out your investment journey in India.