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I recently opened NRO and NRE accounts in India as it is illegal for an NRI to hold resident savings account in India. I want to transfer money from my Resident savings to account to my NRO account and then close the resident account, However, I am not able to transfer the funds online and I get the message stating:

"Transfer facility from resident to NRO account is not allowed. Please contact the bank"

Is there an RBI guideline for doing this?

When I change the "purpose" of transfer to "rent" or "selling assets", I am able to proceed.

I would like to know if it's okay to specify the wrong purpose (as I assume it's illegal). How do I transfer funds otherwise (going to bank is not an option)?

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Tell the bank that you are now an NRI and ask them to convert your resident savings account -- which you are no longer entitled to hold -- into an NRO account. The bank will be eager to oblige because it is also illegal for them to allow you to hold a resident savings account once they know that you are an NRI. Once this is done, you can transfer money from one NRO account to another NRO account and close out the one you don't want to keep. Or keep both.

Note: if your resident savings account is jointly held with other residents (e.g. parents or siblings), then converting it to an NRO account might have other issues, especially if the joint holders have been operating the account, or putting their own money into it (or making deposits of cash that you have been sending them through hawala channels for deposit into your joint account).

  • Thanks for answering. Could you answer this question "I would like to know if it's okay to specify the wrong purpose (as I assume it's illegal). How do I transfer funds otherwise (going to bank is not an option)?" – Arpit Bajpai Jan 9 at 9:49

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