The Reserve Bank of India has warned against misleading advertisements of unauthorized electronic trading platforms (ETPs) offering forex trading services to Indian residents, including on social media platforms, search engines, OTT platforms, gaming applications, 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 and exorbitant returns. Further, there have been reports of fraud committed by such unauthorized ETPs/portals and many residents losing money through such trading/schemes.
Resident persons can undertake forex transactions only with authorized persons and for permitted purposes, in terms of the Foreign Exchange Management Act, 1999 (FEMA). They should be undertaken only on ETPs authorised for the purpose by the RBI or on recognised stock exchanges — NSE, BSE and Metropolitan Stock Exchange of India as per the terms and conditions specified by the RBI from time to time. Remittances for margins to overseas exchanges/overseas counterparties are not permitted under the Liberalised Remittance Scheme (LRS) framed under FEMA.
A list of authorised persons and authorised ETPs is available on the RBI website. Resident persons 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 FEMA, the regulator stated