RBI red flags unauthorised forex trading platforms, warns of penalties

Cautions public against undertaking forex deals on unauthorised electronic trading platforms, or remit and deposit money for such transactions

The Reserve Bank of India (RBI) on Thursday cautioned the public against undertaking forex transactions on unauthorised electronic trading platforms (ETP), or remit and deposit money for such unauthorised transactions.

“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 in a statement on its website.

Any individual who undertakes foreign exchange transactions not authorised by the RBI, or with unauthorised persons and electronic trading platforms (ETP), will be liable to penal actions under Foreign Exchange Management Act.

The central bank’s caution comes after misleading advertisements of such unauthorised ETPs offering forex trading facilities to Indians, 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/investment schemes and entice them with promises of disproportionate/exorbitant returns,” the central bank said, adding these transactions often lead to frauds as well.

The list of authorised persons, such as banks, money changers, off-shore banking units etc. are updated regularly on the RBI website. Complaints regarding such unauthorised platforms can be filed on the National Cyber Crime Reporting Portal.