Forex Trading Alert: Everyone wants to get high returns on any investment or trading they do. Many times, in pursuit of high returns, we go to the wrong platform. In such a situation, there is a fear of becoming a victim of fraud. The Reserve Bank has asked Indians to be wary of entities offering forex trading facilities with promises of such exorbitant returns.
Forex Trading Alert: The Reserve Bank of India (RBI) on Wednesday issued an alert against unauthorized entities offering Forex trading facilities to Indians with promises of exorbitant returns. RBI has asked all banks to refer an alert list containing the names of entities who are not allowed to conduct forex transactions and also to inform their customers.
Getting the work done through an agent
RBI investigation revealed that to facilitate unauthorized forex trading, these entities have resorted to involving local agents. These agents open accounts in various bank branches to collect money for margin, investment, fees etc. These accounts are opened in the name of individuals, proprietary concerns, business firms etc. and the transactions in such accounts are in many cases not found to be in accordance with the stated purpose of opening the account.
Providing this option for currency transactions
It has also been observed that these entities are providing options to residents to send/deposit funds in Rupees and conduct unauthorized foreign exchange transactions using domestic payment systems like online transfers, payment gateways, etc. RBI has directed banks to advise their customers to deal in foreign exchange only with ‘Authorised Persons’ and ‘Authorised ETPs’ and to keep the list of ‘Authorised Persons’ and ‘Authorised ETPs’ available on the RBI website. Publicize the list widely. The RBI letter said there is a need for greater vigilance to prevent misuse of banking channels in facilitating unauthorized forex trading.
Stay alert
RBI has reminded banks that no entity shall operate electronic trading platforms (ETPs) without obtaining prior authorization from the Reserve Bank of India. Therefore, AD Cat-I banks are advised to be more cautious and exercise more caution in this regard.
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