Like everything else in India, opening a bank account requires a certain amount of internet research and oodles of patience. Expats arriving in
Here’s explaining the process and requirements in a few simple steps.
When can you open a bank account?
Tto open a bank account you would need to provide a “Proof of Address” in India and your FRRO registration, in addition to your passport and visa. So you can only apply for a bank account once you have your rent agreement and FRRO registration with you.
What type of bank account to open?
You are probably thinking, “Why should this be difficult?” Well, it is only when you are standing in front of a bank executive, who is asking you several poignant questions – Savings bank account or Current bank account? NRE or NRO? What is your monthly salary? What is your occupation? Where are your current funds coming from? Would you like to open a Women’s Account? No Frills Account? Many Frills Account? – that you realise this is not as simple as it seems! Retail banking customers in India are spoiled for choice – check any bank’s website and you will see why. For expats who are not in India on an employment visa, this last question is the deciding factor – If you are not earning money in India then where are your funds coming from? Very often, this could lead to “I am sorry but you will not be able to open a bank account with us.” It leaves you wondering, so I can only open a bank account if I earn money in India. What happens to the many students, researchers etc who come to India?
The common assumption by most banks is that if you are opening a bank account, you are earning a salary here in India. So most accounts are opened as Expat Accounts, which require anywhere between INR 150,000 to INR 300,000 deposit just to open the account. In addition you need to keep a quarterly balance of INR 100,000 to 150,0000 failing which you will be charged a penalty. These accounts, as with most accounts offered to retail customers, irrespective of nationality, offer the basic facilities of Internet and Mobile banking, foreign remittances, ATM and cheque books with the additional benefit of a personal Relationship Manager! What does a personal relationship manager do? Well they take care of just about every banking requirement that you may have right at your doorstep!! All you need to do is contact them and they will help you out. The downside of this arrangement is that you are easy pray for being coerced into buying other banking products. But of course, you can decline. The advantage is that you do not have to visit the bank personally to get your work done.
Most banks offer a similar account under the guise of different names – Advanced Account, Expatriate Account, NRI account and the list goes on. What is important to remember is that irrespective of the name, the account must have the same benefits for you.
Should I opt for an account with an International Bank or an Indian bank?
To open a bank account with international banks like HSBC or Citibank, you would need to deposit an initial amount of INR 100,000 and above. Moreover the average quarterly balance requirement would be higher. In addition, the surcharges for accounts with international banks are also higher. The advantage is that the bank has a global presence, so yes, you will probably have less difficulties accessing your money when overseas. I say ‘probably’ because there have been cases where expats travelling overseas have not been able to access their bank accounts even though it was with an ‘international’ bank. The other dilemma that I faced when trying to open bank accounts for expats with international banks is that if the expat is in India on a visa other than an Employment Visa, then the bank is not sure which account is suitable and in some cases they refuse to open the account at all.
Indian banks like HDFC, on the other hand, have simpler procedures to open an account. Moreover, the inital deposit amount is only INR 10,000 and they provide all the same facilities that you would get with an international bank – ATM, Cheque book, internet and mobile banking etc. Depending on the account you open, you could also get a dedicated Relationship Manager.
So to summarize, all banks, whether international or Indian, offer similar levels of service and products, so it is only YOUR requirement which should be the deciding factor.
How to open a bank account?
Here are a few simple steps to open a bank account in India.
- Step 1: Decide YOUR banking requirements – What do you want from a bank account? Is it just to act as a depository for cash? Will you be doing outward remittances frequently or have frequent inward remittances? Will your salary be credited to this account directly? Do you require internet or phone banking facilities? The questions are endless! It is important to be clear with your requirements so you can sift through the multitude of choices and choose what is right for you.
- Step 2: Research – Once you have decided on what you want out of a bank account, you then need to do a little research. The extent of your research is dependent on your requirements. If you have an Employment Visa then you can open a salary account as you will be earning an income in India. The company employing you will most likely complete this formality. If you have any other visa, then you would need to open a standard Expat / Non Resident Indian (NRI) account and you will need to maintain an average quarterly balance in your account. Depending on the account you open, the amount varies and so does the penalty for not maintaining this balance. So if you are a person who does not follow your account status closely, then preferably look for an account with the least quarterly balance you can find. Secondly, read the terms and conditions when opening your account and BE AWARE of penalties and surcharges applicable. Some banks, in trying to advocate online transactions, charge for cash payment of credit cards. Some banks charge for cheque books, duplicate accounts statements and so on, so you need to keep yourself informed.
- Step 3: Select the most appropriate bank and account for your requirements. You can visit the bank to complete the account opening formalities or you can even apply online for the account. If applying online, you will be contacted by the bank’s representative, they will collect the required documentation from you and your account will be opened. Irrespective of the bank, accounts generally take 7-10 working days to be opened. You will receive a welcome kit from the bank with your cheque books and account details. This will be followed by your ATM card and ATM pin in separate couriers. If you have opted for internet banking you will receive you Net Banking User ID separately. Do note that once you receive your ATM card and pin, you must activate the card at the bank’s ATM. Similarly, you would need to register for net banking as soon as you receive the user ID to activate your account.
Having completed these three simple steps, you will now have a fully operational bank account!
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