What is the difference between an NRI and OCI holder for banking purposes?

One thing worth checking is whether you're mixing up three different concepts: Indian citizenship, residence under FEMA rules, and OCI status.

An Indian citizen living abroad can be an NRI. A foreign citizen of Indian origin living outside India can be an OCI holder and may fall under the PIO category for certain RBI banking provisions.

For example, RBI's FAQ says an NRO account may be maintained by a person resident outside India, while NRE and FCNR(B) have their own eligibility rules.

That's why I wouldn't base the decision just on whether someone has an OCI card.

If you already have an Indian resident savings account, ask your bank specifically:

1. What should happen to my existing resident account after becoming a foreign citizen?
2. Am I eligible for NRO, NRE or FCNR(B)?
3. What KYC documents do you need?
4. What documentation is needed for remittances from abroad?
5. Are there any tax or repatriation implications I should separately check?

The exact process can also vary between banks, so I'd get the answer in writing from the bank and compare it with the current RBI requirements.

My experience was slightly different. I became a US citizen but didn't have an OCI card immediately, so I initially got confused about what the bank wanted me to do with my old Indian savings account.

The important distinction for me was that becoming a foreign citizen changed my citizenship status, while being resident outside India was the factor relevant to the non-resident account rules.

I eventually opened an NRO account and later opened an NRE account after getting the documentation sorted out. The bank's KYC team asked for my foreign passport and OCI-related documents.

From what I understand, NRO and NRE are not simply two names for the same account. RBI's published FAQ lists NRE, NRO and FCNR(B) separately and describes different eligibility and purposes for them.

So I would not assume that an OCI card means you automatically have exactly the same banking arrangements as an Indian citizen NRI. There are similarities for certain non-resident account rules, but citizenship and residency are separate things.

Also check whether your existing account needs conversion rather than just opening a new account. That was the part I initially overlooked.

I went through something similar after becoming a Canadian citizen.

The main thing I learned is that "NRI" and "OCI holder" aren't really interchangeable terms. An NRI is an Indian citizen who is resident outside India. An OCI holder is a foreign citizen, so the citizenship part is different.

For banking purposes, though, OCI holders can fall within the PIO category used in RBI's non-resident account rules, provided they are resident outside India. RBI's FAQ specifically says an OCI cardholder is included within the PIO definition for this purpose.

I converted my old resident account after discussing it with my bank rather than simply opening another account. The bank asked for my Canadian passport and OCI documentation, along with the usual KYC information.

I also asked about NRE and NRO accounts. The bank explained that the account type depends on what kind of money I receive and how I intend to use the account. I wouldn't rely on another person's exact setup because banks can ask for additional KYC documents.

If you've recently acquired foreign citizenship, I would first tell the bank that your residential/citizenship status has changed and ask what they require to update the existing account.