RBI Alert: Uncover Unauthorised Forex Platforms with Updated List 2023
The Reserve Bank of India (RBI) issued an updated alert list, identifying Unauthorised Forex Platforms to engage in forex transactions under the Foreign Exchange Management Act, 1999 (FEMA). These entities are also not permitted to operate electronic trading platforms (ETPs) for forex transactions. The RBI emphasizes that the public should avoid participating in forex transactions on unauthorized ETPs or remitting/depositing money for such transactions.
The alert list comprises entities, platforms, and websites suspected of promoting unauthorized ETPs. This includes those advertising such entities or falsely claiming to offer training/advisory services, as highlighted by the RBI.
It’s crucial to note that the list provided by the RBI is not exhaustive. The RBI clarifies, “An entity not listed in the Alert List should not be assumed to be authorized by the RBI to engage in foreign exchange dealings or operate electronic trading platforms for forex transactions.” To verify the authorization status of any person or ETP, individuals can refer to the list of authorized persons and ETPs available on the RBI’s website.
According to the Foreign Exchange Management Act, 1999 (FEMA), residents can engage in forex transactions solely with authorized entities and for approved purposes, as clarified by the Reserve Bank of India (RBI). While electronic execution of permitted forex transactions is acceptable, it must occur exclusively on electronic trading platforms sanctioned by the RBI or recognized stock exchanges, as specified by the central bank.
The RBI also issued a warning regarding entities, platforms, or websites that seemingly endorse unauthorized entities or electronic trading platforms (ETPs). This includes instances where such entities advertise or claim to offer training or advisory services, such as through social media or video streaming platforms, using ‘demo trading’ in a ‘simulated environment,’ or other indirect methods to facilitate forex trading through unauthorized entities.
Emphasizing the repercussions, the central bank reiterated that residents using any means to remit or deposit funds—directly or indirectly—in INR or any other currency for forex transactions, beyond FEMA-permitted purposes or on ETPs not authorized by the RBI, expose themselves to penal action under FEMA provisions.
The alert list published by the RBI identifies entities, platforms, or websites suspected of promoting unauthorized entities or ETPs. This includes those involved in advertising unauthorized entities or claiming to provide training or advisory services.
The central bank also reiterated that “residents using any means to remit/deposit funds, directly or indirectly, in INR or in any other currency, for undertaking forex transactions for purposes other than those permitted under the FEMA or on ETPs not authorised by the RBI shall render themselves liable for penal action under the provisions of FEMA.”
