Why Financial Planning?

Planning is bringing the future into the present so that you can do something about it NOW.

Mr. Vishnu had been working in South Africa for the last few years. Even though he was abroad, there were financial management tasks to be done in India.

He has some investments that earn returns. He owns a house that gets rental income. He has to file tax returns as well. He used to come to India to his hometown for about 3-4 weeks around once a year but could not do much in terms of managing his finances.

Most of his financial matters including investments were being handled by his father.

NRI Control of Your Finances
Understand His Current Financial Situation

Now he has come back to India for good and he wants to understand his financial status and also start managing his financial life.

He does not see eye to eye with his father when it comes to finances as every generation subscribes to a different view of money matters.

Moreover, since he was abroad, he does not have a true picture of the financial markets in India.

So how does he get back control of his finances such that he is able to manage his finances optimally?

Check – RNOR Status

Understand His Current Financial Situation

He needs to get an overall view of his financial status. It can be done by obtaining

  • Bank statements
  • Past tax returns
  • Demat account statements
  • Other investment and liability related documents
  • Automated debits from his bank account

This will help him evaluate the value of his assets and liabilities. It will give him an idea of how his investment portfolio looks like. He will obtain a perspective on his current returns and potential returns.

Read – Financial Planning For NRIs

Understand Insurance

He should know the amount of insurance coverage that he has. He has to

  • Check the number of insurance policies that he had bought
  • Ascertain if the policies are useful
  • Segregate policies that are valid and those that have lapsed
  • Check the amount of premium being paid

Must Read –Can a NRI buy agricultural land in India

Frame His Financial Goals

If he has not already done it, he must list down his short-term and long-term financial goals. They could be related to his plans in terms of his professional life and personal life.

He must have a plan regarding his life in India. Where does he plan to stay? What kind of lifestyle does he want and what lifestyle can he afford? If he has a job in India, he has to decide where he wants to live, how he wants to commute, and about the schooling-related aspects of his children. If he has a business or is planning to establish one, he has to take a different path depending on the cash inflow and outflows. He must additionally set up goals related to children’s education, retirement, etc.

If he is deciding on early retirement, then he has to verify if his savings and investments are enough for a lifestyle he wants to sustain.

Ideally, he should think through all of these things before his return to India so that he can set his plan in motion.

NRI Control Your Finances
NRI Control of Your Finances

Check -Rules of EPF withdrawal for NRIs.

Devise his action plan

He should start implementing the decisions he has made. Some of the important steps are –

  • Buy a good online term insurance policy with high insurance cover (if not taken already), which is a must if one has family members financially dependent upon them.
  • Buy or enhance the health insurance cover such that unforeseen medical emergencies can be taken care of financially. He can create a combination of a base policy + a top-up policy or buy a health plan with add-ons depending on the health conditions of self and family.
  • Convert all accounts to resident Indian accounts. Inform the bank to convert NRE and NRO accounts to resident accounts. Convert investment accounts to resident accounts. FCNR accounts can be continued till maturity and then be converted to Resident Foreign currency accounts or can be closed down.
  • Redefine the portfolio in a series of steps. He should first understand his risk capacity and ability and design an ideal investment portfolio and make a plan to build the portfolio over time. When one is a resident Indian, there are more investment options. For example, as an NRI, he could not have opened a new PPF account or invest in the Sukanya Samriddhi scheme or post office savings schemes. He can decide on an investment plan such that he builds a broad portfolio to get the best returns possible.

Read – How to Fix common mistakes of NRIs

Money is an emotional topic.

Instead of just wrenching back total control, it may be better to have a discussion with his father and let him know of his broad financial plan (if he does not want to share all details) so that he can put forth his point of view. His father will be able to understand his perspective, and they can avoid all kinds of negativity.

He can choose to acquire the services of a financial planner who is experienced in handling NRI financial matters.

Do let us know how you, as a returning NRI managed your financial life or How NRI Control of Your Finances. We can also guide you in your financial journey in your return as an NRI.

Published on February 25, 2021

Hemant Beniwal

Hemant Beniwal is a CERTIFIED FINANCIAL PLANNER and his Company Ark Primary Advisors Pvt Ltd is registered as an Investment Adviser with SEBI. Hemant is also a member of the Financial Planning Association, U.S.A and registered as a life planner with Kinder Institute of Life Planning, U.S.A. He started his Financial Planning Practice in 2009 & is among the first generation of financial planners in India. He also authored Bestseller book "Financial Life Planning". 

  • I would like to start a Demat Account. I am in the USA. I have my NRE account in SBI. What is the procedure for Demat Account starting?

  • Thank you sir for valuable advice.Im 72 yrs old and my only daughter in USA.
    I’m retired Engineer from SAIL and continue with FD interest income.
    My daughter is PhD and working as teacher , having green card.
    I have opened one NRE and NRO account here’s in BOB India 1 and 1/2 year back.With all her attested copies .
    But the new Br.head is asking to submit KYC by coming back in India,or submit in any Br.of BOB at USA,But there is no BOB Branch at Colorado USA.Now Br.head advised to sent through BOB NRI cell , but BOB NRI cell sent a mail to Br.Head to complete formalities and report back to BOB NRI cell.
    BOB branch head has sent msg to complete KYC formalities within 45 days otherwise account will be frozen.
    What should I do in such stalemate condition.Will you help me out I shall pay you fees.Problem is due to reduction of interest I need some money from her from time to time.
    BOB Kolkata handed over NRO and NRE passbook on the day of opening but noNRI cheque book has yet been received.

    Warm regards


  • I am NRI since Dec 2013 and I am planning back to India as resident. Please provide your feed back on what are the steps to proceed to keep me as resident indian as well I will interested to know how to avail certain benifits to continue as per lT acts 1961.
    I would like to plan my finance to live in India.
    What is the procedure to avail RNOR and what are the systems to follow and what are the benifits will be availed with RNOR status.

    • Hi Pandian, As per My Knowledge You can become RNOR

      If you have been in India for 182 days or more in that financial year or
      You have been in India for 60 days or more in a financial year and for 365 days or more in the preceding four years.

      • Hi Shruthi,

        Thanks for your response. I back to India on 23 Jan 2021 and plan to stay back permanently due to non availability of flight services. Please guide me to proceed the financial process to stay back with RNOR status and the related paper works for financial asset to secure and save the taxes for the eligible period.

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