RBI’s Alert: Unauthorised Forex
In recent developments, the Reserve Bank of India (RBI) has raised concerns regarding unauthorised entities offering forex trading facilities, promising extravagant returns.
This article delves into the RBI’s directives aimed at addressing this issue, highlighting the methods employed by unauthorised entities, the misuse of banking channels, and the call for greater vigilance among authorised dealers.
Let’s explore the intricacies of this matter and the implications for the forex trading landscape in India.
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RBI Flags Unauthorised Forex Entities:
- The Reserve Bank of India (RBI) has raised concerns about unauthorised entities offering forex trading facilities with promises of high returns.
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Prompt Reporting by Authorised Dealers:
- Authorised dealers are instructed to promptly report such transactions to the Enforcement Directorate when they detect instances of unauthorised forex trading.
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Methods Employed by Unauthorised Entities:
- Unauthorised entities facilitating forex trading often use local agents to open accounts at various bank branches.
- These accounts are used to collect money related to margins, investments, charges, etc., and are established under the names of individuals, proprietary concerns, trading firms, etc.
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Misuse of Accounts:
- Transactions conducted in these accounts may not align with their stated purpose, indicating potential misuse by unauthorised forex entities.
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Remittance in Indian Rupees:
- Unauthorised entities offer residents the option to remit or deposit funds in Indian Rupees for engaging in unauthorised forex transactions through domestic payment systems such as online transfers and payment gateways.
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Call for Greater Vigilance:
- The RBI emphasizes the need for greater vigilance to prevent the misuse of banking channels in facilitating unauthorised forex trading.
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Advisory to Authorised Dealers:
- Authorised dealers are advised to exercise greater caution and vigilance to prevent the misuse of banking channels for unauthorised forex trading.
In summary, the RBI’s flagging of unauthorised forex entities highlights the importance of monitoring and regulating forex transactions to prevent potential fraud and misuse of banking channels.
Authorized dealers play a crucial role in detecting and reporting such instances to regulatory authorities for appropriate action.