RBI issues alert list of entities not authorized to deal in forex trade

The Reserve Bank of India (RBI) today released an updated alert list of entities which are neither authorized to deal in forex under the Foreign Exchange Management Act, 1999 (FEMA) nor authorized to operate electronic trading platforms (ETPs) for forex transactions. The RBI has cautioned the public not to undertake forex transactions on unauthorised ETPs or remit/deposit money for such unauthorised transactions.

The alert list “includes names of entities/platforms/websites which appear to be promoting unauthorised entities/ETPs, including through advertisements of such unauthorised entities or claiming to be providing training/advisory services,” the RBI said.

The RBI also said that the list is not exhaustive, adding: “An entity not appearing in the Alert List should not be assumed to be authorised by the RBI to deal in foreign exchange or operate electronic trading platforms for forex transactions. The authorisation status of any person/ETP can be ascertained from the list of authorised persons and authorised ETPs available in the RBI’s website.”

Resident persons can undertake forex transactions only with authorised persons and for permitted purposes, in terms of the Foreign Exchange Management Act, 1999 (FEMA), the RBI said. While permitted forex transactions can be executed electronically, they should be undertaken only on electronic trading platforms authorised for the purpose by the RBI or on recognised stock exchanges, the central bank said.

The RBI also cautioned against “entities/platforms/websites which appear to be promoting such unauthorised entities/ETPs, including through advertisements of such unauthorised entities or claiming to be providing training/advisory services (e.g. on social media including video streaming platforms) by providing for ‘demo trading’ in ‘simulated environment’ and such other indirect means for facilitating and doing forex trading through unauthorised entities.

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.”

The alert list, the RBI said, also contains names of entities/platforms/websites which appear to be promoting unauthorised entities/ETPs, including through advertisements of such unauthorised entities or claiming to be providing training/advisory services.RBI alert list