Remain vigilant, RBI warns investors as complaints of unauthorised forex trading sites emerge
The Central Bank stated that it has come across misleading advertisements for unlicensed electronic trading platforms (ETPs) offering forex trading services to Indian residents, including social media platforms, search engines, Over The Top sites, gaming apps, and other similar platforms.
FollowThe Reserve Bank of India (RBI) expressed concerns on Thursday about unlicensed electronic trading platforms that provide FX trading services to Indian consumers. The Central Bank stated that it has come across misleading advertisements for unlicensed electronic trading platforms (ETPs) offering forex trading services to Indian residents, including social media platforms, search engines, Over The Top sites, gaming apps, and other similar platforms. There have also been instances of such ETPs using agents to physically contact naive customers and lure them into participating in forex trading and investment schemes with promises of disproportionate and extravagant profits.
Furthermore, according to the RBI, there have been instances of fraud performed by such unlicensed ETPs or portals, with many citizens losing money as a result of such trading. The RBI warned the public not to conduct forex transactions on unauthorised ETPs or remit/deposit money for such unauthorised transactions, saying that "resident persons conducting forex transactions for purposes other than those permitted by the FEMA or on ETPs not authorised by the RBI shall render themselves liable for penal action under the FEMA."
The list of authorised people, which includes banks, money changers, off-shore banking entities, and so on, is updated on a regular basis on the RBI website. Complaints about such unauthorised platforms can be made through the National Cyber Crime Reporting Portal.
According to the Foreign Exchange Management Act, Indians can only conduct forex transactions with authorised individuals and for authorised reasons (FEMA). While approved currency transactions can be carried out electronically, they must be carried out only on ETPs authorised by the RBI or on recognised stock exchanges in accordance with the terms and circumstances stated by the RBI from time to time.
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