There have been several cases of forex scams in the recent months where fraudsters lure the public by promising huge returns on investment within a short period. The regulator has repeatedly warned users not to conduct foreign exchange transactions on unauthorized electronic trading platforms (ETPs) or send/deposit funds for unauthorized foreign exchange transactions.
Using an unauthorized platform for forex transactions may result in loss of money and punitive action against you. “As per FEMA, resident individuals are not permitted to conduct foreign exchange transactions on unauthorized ETPs,” RBI said.
What if you do forex transactions with unauthorized persons or online platforms?
If you transact foreign exchange with unauthorized persons or on electronic trading platforms, you may face legal action under FEMA, 1999. “Resident persons who carry out foreign exchange transactions with unauthorized persons and for purposes other than those permitted under the FEMA Act, make themselves liable to punitive action,” according to the RBI website.
“Forex and currency trading is legal in India, but failure to comply with authorized brokers or permitted currency pairs is a punishable offense under FEMA,” said Bharat Chugh, former judge and advocate of India.
interpretation of the results of forex trading and transactions with unauthorized dealers or platforms, said Manit Pal Singh, partner, IP Pasricha & Co., “If any person has carried out business illegally, that person shall be fined up to Rs 10,000 for that day.” , the day on which he or she has. For more days, for each day of the contravention the same amount may be imposed, in addition to the initial Rs. 10,000, according to the Act (under section 13 (under 1C), a Forex trader who indulges in illegal activity can also be jailed for up to five years.”
Hence, you need to be careful while doing forex transactions online or offline. Here is a guide for you.
How can you do forex transactions?
Persons resident in India (as defined by section 2(v) of FEMA, 1999) are permitted to undertake foreign exchange transactions with persons authorized only for the purposes permitted under FEMA, 1999. You can also do online forex transactions on electronic trading platforms which are permitted. authorized for this purpose by the regulator. You can also do forex transactions on the stock exchanges – National Stock Exchange of India Limited (NSE), BSE Limited, (BSE) and Metropolitan Stock Exchange of India Limited (MSE) in accordance with the terms and conditions specified by RBI from time to time, as per RBI website.
Who are the authorized persons or trading platforms for forex transactions?
An authorized person or an entity authorized by the Reserve Bank of India to deal in foreign exchange as per the electronic trading platform regulator. “It may be an authorized dealer, money changer, off-shore banking unit or any other person under sub-section (1) of section 10 of FEMA,” the RBI said.
List of Unauthorized Entities Offering Forex Transactions
To protect investors from scammers, the central bank issued an ‘alert list’ on September 7, 2022, which named 34 non-automated entities and advised Indian investors to refrain from using its platform. Here is the complete list of 34 forex trading online platforms banned by the regulator.
Alpari
AniFX
Ava Trade
binomial
eToro
Exness
Expert Option
fbs
FinFXPro
forex.com
forex4money
foxorex
FTMO
FVP Trade
fxprimus
fxstreet
FXCM
FxNice
FXTM
hotforex
iBell Markets
IC Markets
iForex
IG Markets
IQ Choice
nts forex trading
OctaFX
Olymp Trade
TD Ameritrade
TP Global FX
Business Vision FX
urban forex
XM
xtb
However, this above list is not exhaustive. RBI had earlier said that the alert list is based on what was known to the regulator at the time of publication. It further states that any entity not in the “alert list” should not be deemed to be authorized by the RBI.
How to check whether your forex dealer or online platform is authorized by RBI
You can check the authorization status of any individual or electronic trading platform from the list available on RBI website.
You can check the list of authorized dealers on the RBI website:
https://rbi.org.in/scripts/category.aspx
For a complete list of money changers: You can check this out
Here,
List of authorized franchisees of authorized dealers or full money changers can be checked
Here,
The regulator has also released a list of full-fledged money changers whose license has been canceled by the Reserve Bank of India. you can check the list
Here,
Authorized electronic trading platform
RBI has mentioned that any entity shall be permitted to operate an electronic trading platform (ETP) for transactions in instruments such as securities, money market instruments, foreign exchange instruments, derivatives or other instruments specified by RBI under Section 45W of Chapter III-D. is not permitted. of the RBI Act, 1934, without obtaining prior authorization of the Reserve Bank.
You can find the complete list of electronic trading platforms authorized for forex transactions
Here,