Online Payment for Forex Trade, RBI Asks Firms
AMID introduction of illegal online forex trade by certain companies, the Reserve Bank of India has asked credit card-issuing companies to not permit payments for such transactions.The regulations under Foreign Exchange Management Act (FEMA), 1999, do not permit resident Indians to trade in foreign exchange in domestic or overseas markets.
RBI's instruction comes in the wake of introduction of overseas foreign exchange trading on a number of internet and electronic trading portals, luring the residents with offers of guaranteed high returns based on such forex trading.
Several people have lost heavily in forex trade through internet portals in the recent past.
The advertisements by these internet or online portals exhort people to trade in forex by way of paying the initial investment amount in Indian rupees, RBI said.
Many companies even engage agents who personally contact gullible people to undertake forex trading and investment schemes and entice them with promises of disproportionate or exorbitant returns, according to the central bank.
Such companies ask public to make the margin payments for such online forex trading transactions through credit cards or deposits in various accounts maintained with banks in India.
The card-issuing companies who may also be advised to remain alert against permitting payments for such unauthorised transactions, according to RBI.
Financial Chronicle, New Delhi, 11-04-2011
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