Q457. Effect on Indian bank accounts after surrendering Indian passport

Question: Dear Sir, I have very recently acquired a foreign nationality and I would want to surrender my Indian passport to the Indian embassy. But my concern is I have some money lying with an Indian bank in the form of FD and Mutual Fund from where I get some good amount of yearly interest. But now my fear is if I surrender my Indian passport, shall I be entitled to enjoy the same interest from the Indian bank and as a foreigner can I keep the money in Indian bank and withdraw as and when I require? Please advise. Best regards,

Answer: Currently NRE FIXED DEPOSITS with effect from 7th June 2013 offer an interest rate of 8.75% for NRIs. Even the NRO account gives 8.75% for a one year Fixed Deposit and it so happens that even domestic fixed deposits are giving the same rate of interest. The only difference is domestic senior citizens interest rate which is normally .25% higher on their FD. Not surrendering your passport for the purpose you mention is illegal and unnecessary as there is no loss of interest income under current conditions. if you have Fixed Deposits that were locked in previously at higher rates, normally they would be allowed until maturity. Bank accounts in India and passport surrender after acquiring foreign citizenship are two different things. In case you decide not to surrender you prior Indian passport you would face problems seeking any type of consular services such as getting an Indian visa or OCI from Indian consulates abroad.