RBI Explores Tougher Measures To Tackle Illicit Forex Trading
The Reserve Bank of India (RBI) is actively engaging with both banks and the government to introduce more stringent measures preventing the misuse of banking channels for illegal forex trading. Recent arrests related to illicit activities have spurred this initiative, aiming to tackle the growing concern over unauthorised forex transactions, as per a media report.
Earlier this year, the Directorate of Enforcement apprehended two businessmen in Kolkata in connection with illegal forex trading. Investigations uncovered their control over 180 bank accounts, leading to the seizure of Rs 120 crore. To address such concerns, the RBI has compiled a watchlist containing 75 entities, including unauthorized platforms and websites involved in illicit forex transactions.
In a recent communication to all stakeholders, the RBI sought suggestions to combat illegal forex trading and stressed the importance of raising public awareness. The central bank is reportedly pushing for closer collaboration with banks to ensure strict adherence to Know Your Customer (KYC) norms for all involved in forex transactions.
Bank officials have proposed additional technological controls, in partnership with the government, to bolster oversight of forex transactions. Both public and private banks are expected to provide recommendations to the RBI to fortify regulatory measures, as per the ET report.
Moreover, the Ministry of Electronics and Information Technology (MeitY) is set to cooperate with the RBI in identifying more illegal platforms engaged in unauthorized forex activities. Leveraging technology to identify and curb such activities, the regulator seeks government support to enforce stringent controls.
The RBI has issued multiple advisories cautioning against engaging with unauthorized entities and platforms. Emphasizing legal consequences under the Foreign Exchange Management Act, 1999 (FEMA), the RBI warns resident persons against conducting forex transactions on non-authorized platforms.
In tandem with regulatory measures, the RBI urges stakeholders to participate in awareness programs educating the public about the risks associated with unauthorized electronic trading platforms (ETPs). The central bank has flagged misleading advertisements on various platforms, including social media, search engines, gaming apps, promoting unauthorized ETPs offering forex trading facilities to Indian residents. Entities like Alpari, AnyFX, Ava Trade, Binomo, eToro, Exness, Expert Option, FBS, FinFxPro, Forex.com, Forex4money, and Foxroex feature on the RBI's list.
