Does NRI need to open NRI Demat account if he has resident Demat account?

Yes, you need to close the existing Demat Account opened when you were a 'Resident Indian', and a new NRI demat account needs to be opened. The securities held in your old demat account can be moved to the new NRI demat account.

You would need to present documents supporting the acquisition of the securities like contract note or a letter of allotment.

In case if you do not plan to make any fresh investments as an NRI, then you can continue holding the existing resident Demat account to hold the securities purchased in the capacity of a resident Indian on a non-repatriable basis with no plans to sell in near future.