The central bank said that there was a need for greater vigilance to prevent the misuse of banking channels in facilitating unauthorised forex trading
The Reserve Bank of India (RBI) on Wednesday flagged unauthorised entities offering foreign exchange (forex) trading facilities with promises of exorbitant returns. The central bank said that authorised dealers should promptly report such transactions to the Enforcement Directorate when they detect such instances.
Upon investigation, the RBI noted that to facilitate unauthorised forex trading, these entities have employed local agents to open accounts at various bank branches for the purpose of collecting money related to margins, investments, charges, and more. These accounts are established under the names of individuals, proprietary concerns, trading firms, etc.
In several instances, the transactions conducted in these accounts do not align with the stated purpose for their establishment. Additionally, these entities are offering residents the option to remit or deposit funds in Indian Rupees for engaging in unauthorised forex transactions via domestic payment systems such as online transfers and payment gateways, the RBI said.
The central bank said that there was a need for greater vigilance to prevent the misuse of banking channels in facilitating unauthorised forex trading. The authorised dealers were advised to be more vigilant and exercise greater caution in this regard.
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Pooja Gupta
CA Pooja Gupta (CA, ISA, M.com) having 15 years of experience.
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