Is a new trading account required if an NRI becomes a resident or if a resident becomes an NRI?
Yes, a new trading account is required when your residency status changes — from Resident to NRI or from NRI to Resident. This is mandatory under SEBI and RBI guidelines to ensure correct classification of trading accounts based on the investor's current legal status.
When is a new account required?
- Resident to NRI:
You must close your resident trading account and open a new NRO Non-PIS trading account linked with a valid NRO bank account. - NRI to resident:
You must close your NRI trading and Demat account and open a fresh account as a Resident Individual.
Category code
- Code '01': Resident Individual
- Code '11': Non-Resident Indian (NRI)
The broker (FYERS) is required to report and maintain these codes correctly for all clients as part of regulatory compliance.
What if...
| Scenario | What you should know |
|---|
| You fail to update your residency status | Trading activity may be flagged as non-compliant or result in regulatory action |
| You continue using your old account | You must voluntarily close it and open the appropriate account type |
| You’re unsure about your status | Use the FEMA definition: if you're abroad for education, employment, or business for more than 182 days, you’re considered an NRI |
Keep your PAN, KYC, and bank accounts updated in sync with your current residency status. Use FYERS NRI onboarding tools to ensure a smooth transition with minimal documentation errors.
References
RBI Master Circular dated RBI/2010-11/13 dated July 01, 2010.
FAQs hosted on RBI website www.rbi.org.in
NSE Circular dated Nov 27,2003 , NSE/INVG/2003/4593
NSE Circular dated Dec 21,2004 , NSE/MEM/5676
NSE Circular dated Jul 04,2008 , NSE/INSP/10938
Last updated: 24 Jun 2025
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