The Reserve Bank of India (RBI) has cautioned citizens against unauthorised forex trading platforms. The central bank has noticed misleading advertisements of unauthorised electronic trading platforms (ETPs) offering forex trading facilities to Indian residents, including on social media platforms, search engines, OTT platforms and gaming apps.
Further, there have 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.
The central bank further said 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). 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 (National Stock Exchange of India Ltd., BSE Ltd. and Metropolitan Stock Exchange of India Ltd.) as per the terms and conditions specified by the RBI from time to time, the central bank said.
It is also clarified that remittances for margins to overseas exchanges / overseas counterparties are not permitted under the Liberalised Remittance Scheme (LRS) framed under the FEMA, the central bank said in a statement.