Convert RI demat account into NRO account for transferring funds

I am a permanent resident of Canada. I have 2,000 shares that I’ve held in my resident Indian (RI) demat account for the last 5 years. I also have an NRO account with a private bank in India that I wish to use to repatriate funds to my Canadian bank account. However I am told that I cannot transfer funds from the from my RI demat sale proceeds directly to my NRO, so I was wondering if I can transfer the funds to an RI savings account first, then transfer funds locally to my NRO account in order to repatriate the funds to my overseas (Canadian account)? I was also told by the bank that I could bring up to $1 million for higher education or medical purposes. Is this specific to the bank or general RBI guidelines? 
— Karthik
As an NRI, you cannot hold any RI accounts, either bank or demat. You will have to first convert your RI demat account into an NRO demat account. The bank will help you with this. Then you can sell the shares and transfer the funds to your NRO account. Also, you need to close your RI savings account (if any).

As far as remitting the proceeds is concerned, the procedure is as follows. This process has been modified from July 1,2009. First, you would need to provide the bank with a certificate from an Indian chartered accountant. This certificate is to be provided in prescribed form 15CB. You would also need to fill out form 15CA. This form is also known as the ‘undertaking’ that requires the remitter to furnish details regarding the proposed remittance. The information to be furnished in Form 15CA is to be filled using the information contained in Form 15CB (certificate). Form 15CA has to be then uploaded on www.tin-nsdl.com. The remitter will then take a print out of this filled Form 15CA (which will bear an acknowledgement number generated by the system) and sign it.

The duly signed Form 15CA (undertaking) and Form 15CB (certificate), has to be submitted to the bank who will in turn forward a copy the certificate and undertaking to the Assessing Officer concerned. Once this is done, the funds may be remitted abroad. The limit for higher education and medical purposes is $100,000 and that too is applicable only to resident Indians.

I am interested in NRI investments in India and also in the fixed deposits. However, I am worried about the RBI's repatriation laws that changes any time and may compel me to keep the money in India with no option of repatriation. Please advise.
--- Kedar
Note that over the past years, regulations related with remittance and repatriation for NRIs have actually been liberalised steadily. Now a million dollars may be remitted from one's NRO account per year. Even for residents, limits have been enhanced. They may invest/ send as gifts abroad up to $200,000 per annum from $25,000 earlier. India's foreign exchange reserves are quite high and the country continues to attract more foreign investment, both portfolios as well as FDI. Therefore, there is no possibility of the government to compel any investor to keep the money locked in the country without any option for repatriation.

The writer is director, Wonderland Consultants a tax and financial planning firm. He may be contacted at sandeep.shanbhag@gmail.com