Mumbai: The Reserve Bank of India (RBI) on Wednesday raised concerns about unauthorised entities offering foreign exchange (forex) trading facilities to Indian residents with promises of disproportionate/exorbitant returns. The central bank said that banks should promptly report such transactions to the Enforcement Directorate when detected.
The RBI said that on investigation, it found that to facilitate unauthorised forex trading, these unauthorised foreign exchange 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 and the transactions in such accounts are not found to be commensurate with the stated purpose for opening the account in several cases. “It is also observed that these entities are providing options to residents to remit/deposit funds in Rupees for undertaking unauthorised forex transactions using domestic payment systems like online transfers, payment gateways, etc.”
The RBI said that there is a need for greater vigilance to prevent the misuse of banking channels in facilitating unauthorised forex trading. Banks are therefore advised to be more vigilant and exercise greater caution and as and when they come across an account being used to facilitate unauthorised forex trading, they should report the same to the Directorate of Enforcement.
