Recently, Indians have been bombarded with ads on forex trading from shady forex platforms. These ads are in a bid to get retail clients from the country. The Indian authorities have responded by warning citizens to be careful of engaging with these institutions not to lose money.
This caution was issued on Thursday by the Reserve Bank of India (RBI).
Electronic Trading Platforms
According to the RBI, these ETPs (Electronic Trading Platforms) have not been legalized by the government. These forex sites are currently running advertisements on search engines, streaming websites, and all over social media. Some of these unregistered platforms have gone to the extent of using famous figures like actors and sportspeople as part of their campaigns.
These activities portray the forex exchange market in bad light and showcase it as a shady venture.
More also, there have been reports of instances where agents of these institutions reach out to potential customers, telling them to open an account with the company and deposit money. One trick that many unsuspecting folks have fallen victim to is the promise of high returns usually promised within a short period.
According to the country’s Central Bank, many citizens have complained of being defrauded of their hard-earned money by these portals. Citizens who know little or nothing of the forex market and its operations are made to believe that they can invest with no risks attached. After the portals have received many investors, they disappear into thin air.
Presently, India has no regulations guiding the practices of these platforms. Perhaps, restricting the platforms where ads are sent could help put these trading sites under check.
Regulation of Money Transfer
However, the Indian government is restricting the transfer of funds from bank accounts to foreign accounts. This restriction ensures that large sums of money are not sent out to such banks.
The notice from RBI noted that individuals who engage in forex transactions that are against FEMA (Foreign Exchange Management Act) regulations would be penalized according to the law. The public is advised to exercise caution when dealing with such unregistered ETPs.
This is not the first caution against such organizations as the ministry in charge of securities earlier warned citizens about such trading products as margin forex and binary options.