Recently there have been many instances of foreign scams where con artists make promises of substantial returns on investments in a short period of time and people fall for it. RBI has been advising customers to check before conducting foreign transactions. This time it has come up with an alert list telling which of these companies or entities are endorsing unlicensed organizations or alternative trading programs or electronic trading platforms by making ads or claims that they offer advisory services. The Reserve Bank of India has issued a set of alert lists with names of companies that are not authorized to deal with foreign exchange under the Foreign Exchange Management Act 1999 (FEMA). They are also not authorized to undertake any kind of foreign transactions on electronic trading. This is because conducting foreign transactions on unauthorized platforms can land you in legal trouble. An authorized dealer is a person specifically authorized by the Reserve Bank of India under section 10(1) of FEMA to deal with Foreign Exchange or foreign securities. It normally includes the names of banks. There are two categories which are: Banks and full-fledged money changers. There are a total of 56 unauthorized forex trading platforms in the RBI alert list that are neither authorized to deal in forex under FEMA nor authorized to operate electronic trading platforms for forex transactions under the Electronic Trading Platforms Directions. The new entities recently added to the alert list are: • QFX Markets • 2Win Trade • Guru Trade7 Ltd • Bric Trade • Rubik Trade • Dream Trade • Mini Trade • Rust Trade Since these websites and apps are handled by organizations that are based overseas, when investors see the high returns promises and invest their money, India is drained of its foreign reserves. RBI’s hands are tied when it comes to controlling them, even if RBI decides to ban these apps and websites they can always come up with alternate ones. This is why RBI brings this circular to make the citizens of India aware of these fraudulent entities with an aim to help us in being more cautious.
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