The Reserve Bank of India (RBI) on Thursday raised concerns over unauthorised electronic trading platforms offering forex trading facilities to Indian residents.
The Central bank said it 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.
There have also been reports of such ETPs engaging agents who personally contact gullible people to undertake forex trading and investment schemes and entice them with promises of disproportionate and exorbitant returns.
Further, there have been reports of frauds committed by such unauthorised ETPs or portals and many residents losing money through such trading, RBI added
RBI said Indians can undertake forex transactions only with authorised persons and for permitted purposes, in terms of the Foreign Exchange Management Act (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 as per the terms and conditions specified by the RBI from time to time.
“It is also clarified that remittances for margins to overseas exchanges or overseas counterparties are not permitted under the liberalised remittance scheme (LRS) framed under the FEMA,” the Central bank noted. LiveMint