BBN Bureau
‘Unlicensed agents on the prowl for gullible investors’
MUMBAI/February 03-2022: The Reserve Bank of India (RBI) has asked people to watch out for unscrupulous players offering unauthorised forex trading facilities promising quick profits.
These people are using unauthorised platforms to con unsuspecting people who are easy targets for their traps.
RBI has also warned that resident persons undertaking forex transactions for purposes other than those permitted under the Foreign Exchange Management Act (FEMA) or on electronic trading platforms (ETPs) not authorised by RBI shall render themselves liable for penal action under the FEMA.
Misleading ads
RBI has noticed misleading advertisements of unauthorised electronic trading platforms (ETPs) offering forex trading facilities to Indian residents, including on social media platforms, search engines, Over The Top (OTT) platforms, gaming apps and the like.
Enticing returns is the bait
RBI said there have also been reports of such ETPs engaging agents, who personally contact gullible people to undertake forex trading/investment schemes and entice them with promises of disproportionate/ exorbitant returns.
Further, there have been reports of frauds committed by such unauthorised ETPs/portals and many residents losing money through such trading / schemes.
“It is clarified that resident persons can undertake forex transactions only with authorised persons and for permitted purposes, in terms of the Foreign Exchange Management Act, 1999 (FEMA),” RBI said in its notification.
While permitted forex transactions can be executed electronically, they should be undertaken only on ETPs authorised for the purpose by the RBI or on recognised stock exchanges such as National Stock Exchange of India (NSE), BSE, and Metropolitan Stock Exchange of India as per the terms and conditions specified by the RBI from time to time. “More importantly, remittances for margins to overseas exchanges/overseas counterparties are not permitted under the Liberalised Remittance Scheme (LRS) framed under the FEMA”, RBI cautions.
The notification said that a list of authorised persons and authorised ETPs is available on the RBI website. The RBI cautioned the public not to undertake forex transactions on unauthorised ETPs or remit/deposit money for such unauthorised transactions.
