This Article was fact checked and last updated for accuracy on June 21, 2025 by Mani Karthik
Coming back to India after years abroad? You’re not alone. I made this journey in 2017, and trust me, the paperwork doesn’t end with your visa cancellation.
One of the biggest questions I get from fellow returnees is about NRE and NRO accounts. What happens to them? Do you close them? Can you keep them?
Let me walk you through everything I learned the hard way.
My Personal Journey with Bank Account Closure 📖
When I decided to move back from the US in 2017, I had three NRE accounts and one NRO account spread across ICICI, HDFC, and SBI.
The decision wasn’t easy. Mom was alone in Chennai after dad passed away during my college years. My wife initially had reservations. Our younger son was born in the US. The whole family was skeptical about this move.
But sometimes you do what your heart tells you.
And then comes the practical stuff. Like what to do with those NRI accounts that took forever to open.
Understanding NRE and NRO Accounts Post Return 🤔
Quick Refresher:
- NRE (Non Resident External): For parking foreign earnings in India
- NRO (Non Resident Ordinary): For managing Indian income while abroad
Once you become a resident again, these accounts lose their special status. You can’t continue operating them as NRE/NRO accounts.
Account Closure Process: Step by Step 📋
Step 1: Notify Your Bank About Residential Status Change
This is crucial. Don’t wait.
I made this mistake with my HDFC account. Delayed informing them for three months. They charged me penalty fees that took weeks to reverse.
Required Documents:
- Cancelled visa/surrender certificate
- New residential proof in India
- PAN card
- Latest passport
Step 2: Choose Your Path
You have three options:
Option A: Close the Account Completely Option B: Convert to Regular Savings Account
Option C: Convert to RFC (Resident Foreign Currency) Account
Step 3: Handle the Paperwork
Each bank has its own process. But the common requirements are:
- Account closure application
- KYC updates for resident status
- Nominated beneficiary changes (if needed)
- Tax clearance certificate (for large amounts)
Bank-wise Closure Process Comparison 📊
| Bank | Processing Time | Fees | Special Requirements |
|---|---|---|---|
| ICICI Bank | 7-10 working days | ₹500-₹1,000 | Original debit card surrender, signed closure form |
| HDFC Bank | 10-15 working days | ₹750-₹1,500 | Branch visit mandatory, relationship manager approval |
| SBI | 15-20 working days | ₹250-₹750 | Multiple document verification, regional office approval |
Based on my personal experience and feedback from 200+ returnees in our community
Tax Implications You Cannot Ignore 💰
This is where it gets tricky.
Any interest earned on these accounts while you were an NRI needs to be reported in your Indian tax returns post-return.
I learned this the hard way during my first ITR filing as a resident. Had to hire a CA to sort out the mess.
Key Tax Points:
- TDS may apply on closure proceeds
- Capital gains on investments held in these accounts
- Foreign exchange fluctuation gains/losses
Timeline and Fees Breakdown ⏰
Typical Closure Timeline:
- Documentation: 2-3 days
- Bank processing: 7-21 days (varies by bank)
- Fund transfer: 3-5 days
- Final closure: 1-2 days
Fee Structure:
- Account closure fee: ₹250-₹1,500
- Demand draft charges: ₹100-₹300
- Service charges: ₹200-₹500
- Documentation fees: ₹100-₹250
My Biggest Mistakes (Learn from Them) ❌
Mistake #1: Not informing banks immediately about status change Result: Penalty charges and compliance issues
Mistake #2: Trying to close all accounts simultaneously
Result: Confusion and delayed processing
Mistake #3: Not keeping sufficient documentation Result: Multiple bank visits and delays
Pro Tips from 7 Years of Experience 💡
Before You Start:
- Download all statements for tax purposes
- Note down all auto-debits and standing instructions
- Transfer funds to avoid minimum balance issues
During the Process:
- Keep original documents ready
- Take acknowledgment receipts for everything
- Follow up every 3-4 days
After Closure:
- Get closure certificate
- Update your records with mutual funds/insurance companies
- Inform your CA for tax planning
Alternative: Converting Instead of Closing 🔄
Sometimes closing isn’t the best option.
I kept one NRE account open by converting it to RFC. Why? Future travel plans and dollar transactions.
RFC Account Benefits:
- Hold foreign currency in India
- Useful for international transactions
- No repatriation restrictions
Conversion Requirements:
- Minimum balance: $1,000 or equivalent
- Resident status proof
- New KYC documentation
Common Challenges and Solutions 🛠️
Challenge 1: Bank Delays
Solution: Escalate to branch manager after 15 days
Challenge 2: Documentation Issues
Solution: Get documents attested by Indian embassy/consulate
Challenge 3: Tax Clearance
Solution: Engage a CA familiar with NRI taxation
Challenge 4: Fund Repatriation Limits
Solution: Plan transfers across multiple financial years
What Happens to Joint Accounts? 👫
If your spouse is still an NRI, things get complicated.
My wife returned six months after me. During this period, our joint NRE account created operational issues.
Options for Joint Accounts:
- Close if both are residents
- Convert to single name if one is still NRI
- Change to regular joint savings account
Digital vs Branch Process 💻
Most banks now offer online account closure for NRE/NRO accounts.
Digital Process Benefits:
- Faster processing
- No branch visits
- Document upload facility
- Status tracking
When Branch Visit is Mandatory:
- High value accounts (>₹50 lakhs)
- Multiple account closures
- Conversion to RFC accounts
- Dispute resolution
Post-Closure Checklist ✅
Once your accounts are closed:
- [ ] Collect closure certificates
- [ ] Update bank details with employers/vendors
- [ ] Inform credit card companies
- [ ] Update investment folios
- [ ] File tax returns with closure details
- [ ] Keep records for 7 years minimum
My Final Thoughts 💭
Closing NRE/NRO accounts isn’t just about paperwork. It’s symbolic of your journey back home.
Seven years later, I can tell you that coming back was the right decision. Yes, there were challenges. The boys took time to adjust. We missed certain conveniences from the US.
But seeing mom’s face light up every morning? Priceless.
The account closure process taught me patience. Indian bureaucracy works, just differently.
Take your time. Follow the process. Don’t stress about minor delays.
You’re already home. The rest is just paperwork.
Need More Help? 🤝
Connect with our Back to India community. Over 5,000 returnees sharing experiences and solutions.
Remember, every journey back home is unique. But you don’t have to navigate it alone.
Welcome back! 🇮🇳
Sources and References:
- Reserve Bank of India Guidelines on NRE/NRO Account Operations – RBI Official Website
- Income Tax Department Circulars on NRI Taxation – Income Tax India
- FEMA Regulations on Foreign Exchange Management – RBI FEMA Guidelines
- Banking Codes and Standards Board of India – BCSBI Guidelines
- Personal experience and community feedback from 200+ NRI returnees (2017-2024)
Data collected through surveys and interviews with Back to India community members between January 2023 and June 2025