Unauthorised forex dealers duping customers: Names of 75 forex dealers on RBI’s alert list

The Reserve Bank of India (RBI) has observed cases where unlicensed businesses have promised Indian citizens excessive or unbelievable profits when they offer foreign exchange (forex) trading services.

According to the RBI press release dated April 24, 2024, “On investigation, it has been observed that to facilitate unauthorised forex trading, these entities have taken recourse to engaging local agents who open accounts at different bank branches for collecting money towards margin, investment, charges, etc. These accounts are opened in the name 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.”

Additionally, it has been noted that these organisations are giving locals the ability to transfer or deposit money in Rupees in order to conduct illicit foreign exchange transactions using domestic payment methods including internet transfers, payment gateways, etc.

RBI has advised banks to be more vigilant and exercise greater caution in this regard. As and when banks come across an account being used to facilitate unauthorised forex trading, they shall report the same to the Directorate of Enforcement, Government of India, for further action, as deemed fit.

List of unauthorized forex dealers
Authorised Dealer Category banks have the right to recommend to their customers that they should only transact in foreign exchange with "Authorised Persons" and "authorised ETPs," and they should publicise the availability of these lists on the RBI website.

Here is a list of unauthorized forex dealers in RBI’s Alert list
The names of organisations, platforms, and websites that seem to be endorsing unapproved organisations or ETPs are also included in the Alert List. This includes marketing for such unapproved entities and claims to offer advising or training services. This is not a comprehensive list. One should not presume that an organisation not on the list has RBI authorization. The list of approved individuals and authorised ETPs may be used to determine the authorisation status of any individual or ETP. This is the list as on Novermber 24, 2023.

Here are a few importance FAQs on the RBI website regarding foreign exchange transactions.

Can a resident person undertake forex transaction?

Answer: Resident persons are permitted to undertake forex transactions only with authorised persons and for permitted purposes, in terms of the Foreign Exchange Management Act, 1999 (FEMA).

Resident persons undertaking forex transactions with unauthorised persons and for purposes other than those permitted under FEMA shall render themselves liable for penal action under the Act.

Q2. Who are authorised persons?

Answer: An authorised person is an entity authorised by the Reserve Bank of India to deal in forex. It can be an authorised dealer, money changer, off-shore banking unit or any other person for the time being authorised under Sub-Section (1) of Section 10 of FEMA. The list of authorised persons is available here.

Q3. Can a resident person undertake forex transactions on internet / electronic trading portals?

Answer: Permitted forex transactions executed electronically should be undertaken only on electronic trading platforms (ETPs) authorised for the purpose by the Reserve Bank of India (RBI) or on recognized stock exchanges (National Stock Exchange of India Ltd. (NSE), BSE Ltd. (BSE) and Metropolitan Stock Exchange of India Ltd. (MSE)) as per the terms and conditions specified by RBI from time to time. The list of authorised ETPs is available here. As per FEMA, resident persons are not permitted to undertake forex transactions on unauthorised ETPs.

Resident persons undertaking forex transactions on unauthorised ETPs shall render themselves liable for penal action under FEMA.

Q4. What is an Electronic Trading Platform (ETP)? Do they require authorisation from RBI to operate in India?

Answer: Electronic Trading Platform (ETP) means any electronic system, other than a recognised stock exchange, on which transactions in eligible instruments like securities, money market instruments, foreign exchange instruments, derivatives, etc. are contracted. No entity shall operate an ETP without obtaining prior authorisation of RBI under The Electronic Trading Platforms (Reserve Bank) Directions, 2018. The list of authorised ETPs is available here.

Resident persons operating ETPs without authorisation from RBI, collecting and effecting/remitting payments directly/indirectly outside India shall render themselves liable for penal action under the extant laws and regulations, including the Foreign Exchange Management Act, 1999 and the Prevention of Money Laundering Act, 2002.