Things You Should Know About NRI Banking As a UK-based NRI

Living and working in the UK as an Indian expatriate presents its own unique set of opportunities and responsibilities. One of the most important parts of settling in is managing your banking from the UK smoothly. Whether you are a new arrival or have been here for years, having a clear financial plan and regularly reviewing your NRI accounts can make a real difference.

You need to understand your banking rights, keep track of updates from your bank, and know how your financial goals align with the services available to you. Let’s see what regulations you need to be aware of.

Key financial regulations that UK-based NRIs must understand
 

When you become a Non-Resident Indian (NRI) while living in the UK, your financial responsibilities and banking rights shift significantly. Here’s what you need to know to stay compliant and manage your cross-border finances efficiently.

Understanding FEMA
 

The Foreign Exchange Management Act (FEMA) regulates how NRIs can move money in and out of India. It’s the legal framework that governs your ability to hold and manage Indian financial assets once your residential status changes.

What FEMA allows you to do:

• Maintain NRE, NRO, or FCNR accounts to manage income and savings
• Remit funds from abroad into India through official channels
• Invest in Indian real estate (excluding agricultural land) and financial products specifically designed for NRIs
  

What FEMA restricts:

• You must convert your Indian resident savings accounts to NRO accounts.
• NRIs cannot open or continue investments in certain resident-only schemes, such as PPF and NSC
• You’re not permitted to purchase agricultural land, plantation properties, or farmhouses in India
  

FEMA violations can result in financial penalties and legal complications, so it’s essential to update your accounts and investments as soon as your status changes.

FATCA and CRS

The Foreign Account Tax Compliance Act (FATCA) and the Common Reporting Standard (CRS) are global frameworks designed to increase financial transparency. Under FATCA and CRS:

• Indian banks are required to collect and report information about NRI account holders, which is then shared with UK tax authorities through automatic exchange agreements
• When opening an NRI account, you’ll be asked to submit a self-declaration of tax residency.
• You must report global income, including interest earned from Indian bank accounts, in your UK self-assessment tax return.

Non-disclosure of overseas income can lead to penalties in both India and the UK. Understanding these reporting obligations is critical to remaining compliant with Indian tax authorities.

RBI rules that every NRI must follow

The Reserve Bank of India (RBI) has established clear guidelines for how NRIs may access Indian banking services. Key permissions include:

• Repatriation of funds from NRE and FCNR accounts is fully allowed.
• Up to USD 1 million per financial year can be repatriated from NRO accounts after taxes are paid.
• NRIs can take loans against NRE and FCNR deposits under specific schemes.

However, you are required to:

• Convert any existing resident fixed deposits into NRO accounts.
• Cease contributions to Indian retirement schemes, such as the EPF, if you’ve moved abroad permanently.

Along with these, here are some tax-related regulations you must know.

Important UK tax and residency changes for UK-based Indians
 

Regulations for banking in the UK and related taxes are always changing. Here are a few important ones:

• Non-domiciled status abolished

From April 2025, the UK will eliminate the non-domiciled (non-dom) tax regime. All UK residents will be taxed on their worldwide income and gains, regardless of domicile status.

• Introduction of the four-year Foreign Income and Gains (FIG) regime

New UK residents, including returning NRIs who haven't been UK tax residents in the past 10 years, can benefit from a four-year exemption on foreign income and gains. Eligible individuals can claim relief on income earned from overseas duties during the four-year FIG regime period.

• Temporary Repatriation Facility (TRF)

Between April 2025 and April 2028, individuals can remit pre-2025 foreign income to the UK at reduced tax rates — 12% for 2025–26 and 2026–27, and 15% for 2027–28.

• Inheritance Tax (IHT) based on residency

From April 2025, IHT will apply based on UK residency rather than domicile. Individuals residing in the UK for 10 out of the last 20 years may be liable, with exposure lasting up to 10 years after leaving the UK. The IHT threshold remains frozen at £325,000 until 2030, potentially increasing tax liabilities due to appreciation in asset values. From April 2027, pensions will be included as part of the assets subject to IHT.

• Increased CGT rates

Capital Gains Tax rates have risen to 18% for basic-rate taxpayers and 24% for higher-rate taxpayers, aligning with property sale rates.

Overview of NRE, NRO, and FCNR accounts for UK NRIs
 

As an NRI in the UK, you can primarily use three accounts for banking: NRE, NRO, and FCNR. Each serves a different purpose.

• NRE (Non-Resident External)

Rupee-denominated. Funds must be from overseas income. Fully repatriable. Tax-free in India.

• NRO (Non-Resident Ordinary)

Rupee-denominated. Used to manage income earned in India, such as rent, pension, and dividends. Interest is taxable in India and partially repatriable.

• FCNR (Foreign Currency Non-Resident)

Held in major foreign currencies (like GBP or USD). No currency conversion loss. Principal and interest are tax-free and fully repatriable.

Key differences lie in taxation, repatriation, and the denomination of the currency. Choose NRE for tax-free savings from UK earnings, NRO for managing Indian income, and FCNR to protect from exchange rate risks.

Next, let’s look at how to open NRI account from UK.

How to open an NRI account from the UK
 

Opening an NRI account from the UK is a straightforward process. Most Indian banks offer online or branch-assisted methods.
 

1. Visit the Indian bank’s branch or official website
2. Choose the account type (NRE/NRO/FCNR)
3. Fill out the application form and upload or attach the relevant documents
4. Complete KYC using in-person, video verification, or by post
5. Account activation will be done within 7–10 working days

Documents needed
 

• Valid passport
• Proof of UK residency (utility bill, BRP, or Visa)
• PAN card (or Form 60)
• Passport-size photographs
• Initial deposit (varies by bank)
  

Choosing the right bank for your NRI accounts
 

You have been compliant and responsible as an NRI; now it's time to choose the correct bank. Why? With increasing regulatory oversight in UK Banking and banking in India, it’s essential to select a provider that not only simplifies compliance but also supports seamless cross-border access.

The right bank account for NRIs in the UK should offer:

• Robust online banking for anytime access
• Competitive interest rates and exchange rates
• Easy repatriation options for smooth management of funds
• Responsive customer service that understands the unique needs of non-residents

As your banking rights shift under laws like FEMA and FATCA, choosing a bank that ensures timely reporting, tax documentation, and account conversion support becomes vital. When researching how to open an NRI account, look for banks that offer simplified digital onboarding, have UK-based branches or support teams, and transparent fees.

Now that you are updated with the regulations and requirements. Let’s talk about why IDFC FIRST Bank is one of the most reliable banking partners, especially when banking from the UK.

Experience NRI banking that keeps up with you
 

At IDFC FIRST Bank, you get the following benefits as an NRI:

• No branch, no paperwork queues

With IDFC FIRST Bank’s fully digital onboarding, getting started is as easy as logging in.

• Bank on your terms, at your time

From real-time account controls to seamless transactions, the IDFC FIRST Bank app puts complete banking access at your fingertips, anytime, anywhere.

• Stay ahead on compliance

Your FATCA and FBAR obligations are made simpler with ready-to-download interest certificates and TDS reports, all formatted for international tax filings.

• Move your money when you need it

Repatriate up to USD 1 million a year from your NRO account, with expert support to guide you through the required documentation.

• Support that spans time zones

Whether you're in London or Mumbai, the Bank’s global helplines and dedicated NRI services ensure help is always available when you need it.

Recognised by Forbes as one of the World’s Best Banks 2025, IDFC FIRST Bank combines global trust with deep local insight — a smarter way to start your NRI banking journey.

What makes IDFC FIRST Bank NRI Banking stand out?
 

• A comprehensive suite of NRE, NRO, and Seafarer Savings Accounts tailored for global Indians
• Earn interest daily and enjoy monthly interest payouts on your savings
• Attractive interest rates up to 7.00% p.a. on NRE and NRO Savings Accounts
• Tax-free returns on NRE Savings and Fixed Deposits for optimised wealth growth
• Flexible and fully repatriable NRE and FCNR Deposit options with assured returns
• Open accounts instantly and manage them seamlessly via our top-rated mobile banking app
• Higher ATM withdrawal limits, cashback benefits, and a free VISA Signature Debit Card with no annual charges
• 24X7 seamless, zero-fee fund transfers and remittance solutions for convenient money management
• Access mutual funds, travel insurance, term insurance, and the FIRST WOW! Credit Card for a complete financial solution
• Recognised among the World’s Best Banks 2025 by Forbes in partnership with Statista

Stay responsible, stay updated
 

It’s clear that staying compliant with changing financial regulations is essential when living in the UK as an NRI. And understanding FEMA, FATCA, and your banking rights ensures your money is secure and accessible across borders. Pairing that knowledge with the right bank account — one that offers seamless digital services, regulatory support, and ease of repatriation — makes managing your finances smoother. Stay informed about the evolving rules, daily news, and geopolitical developments. And if you're serious about efficient, compliant, and stress-free Banking from the UK, open an NRI account with IDFC FIRST Bank today.