The Reserve Bank of India (RBI) on Thursday raised concerns over unauthorized electronic trading platforms providing forex trading facilities to Indian residents.
The Central Bank said that it has detected fraudulent use of unauthorized Electronic Trading Platforms (ETPs) facilitating forex trading to Indian residents, including social media platforms, search engines, over the top (OTT) platforms, gaming apps and other such methods. Pay attention to advertisements.
There have also been reports of ETP agents joining gullible people to initiate forex trading and investment schemes in person and enticing them with the promise of disproportionate and exorbitant returns.
In addition, there have been reports of frauds by such unauthorized ETPs or portals and many residents have lost money through such trading, the RBI said.
RBI said that under the Foreign Exchange Management Act (FEMA), Indians can conduct foreign exchange transactions only with authorized persons and for the purposes permitted.
While permitted foreign exchange transactions can be executed electronically, they should be done only on ETP authorized by RBI or on recognized stock exchanges as per the terms and conditions specified by RBI from time to time.
“It is also clarified that remittances for margin to foreign exchanges or foreign counterparties are not permitted under the Liberalized Remittance Scheme (LRS) framed under FEMA,” the central bank said.
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