When you must tell the bank
Under the foreign exchange rules (FEMA), your status for banking depends on why you are in India, not on the tax day-count. If you come back to take up a job, start a business or settle, you become a resident for FEMA from the day you arrive. Tell your bank as soon as you return, and give them your new Indian address and tax status.
What happens to each account
| Account | What happens when you return for good |
|---|---|
| NRE savings or deposits | Redesignated as a resident rupee account, or the money is moved into an RFC account if you want to keep it in foreign currency. |
| NRO accounts | Redesignated as ordinary resident accounts. |
| FCNR(B) deposits | Can run to maturity at the agreed rate. At maturity the bank converts them into a resident rupee deposit or an RFC account. |
| Demat and PIS | Your NRI demat and trading accounts need to be changed to resident accounts with your broker. |
| Mutual funds | Update your residential status with each fund house or through the registrar (CAMS or KFintech). |
The RFC (Resident Foreign Currency) account
An RFC account lets a returning Indian keep foreign currency in India: money brought back from abroad, the proceeds of NRE and FCNR accounts, and pensions or other income from abroad.
- It can be held in major currencies such as US dollars, pounds and euros.
- Balances are free of the usual limits on taking money out of India.
- You can use it to pay for things abroad and, under the FEMA rules, to buy property abroad.
Not every bank offers RFC accounts at every branch; ask your bank which currencies and terms it offers.
Assets you still hold abroad
Under section 6(4) of FEMA, a resident can keep, hold and transfer foreign property, bank accounts and investments that were acquired while living abroad or inherited from a non-resident. You do not have to sell them on return. Once you become ordinarily resident for tax, you must report them in your Indian income tax return.
A sensible order
- Before you leave: keep at least one account open abroad if you will still have income, a pension or property there.
- In the first week: tell each Indian bank and fund house your status has changed. Ask for NRE balances to be moved to resident or RFC accounts.
- Within a few months: update your demat account, insurance, PAN details and mutual fund records.
- Before the first tax return: get your residence status worked out. See RNOR status.
Sources: FEMA section 6(4) and bank guidance for returning NRIs, including HSBC India’s FEMA FAQ, checked 21 October 2026. This is general information, not financial advice; your bank’s current terms apply.
