Forex trading has been rampant in India after the cryptocurrency craze fizzled out. These apps have been aggressively advertising themselves; some legitimized themselves by sponsoring IPL teams.
But it’s running out; RBI has released a list of forex apps that are considered illegal in India. RBI released a ‘Warning List’ (opens in new tab)from entities that are neither authorized to operate forex trading platforms nor authorized to trade forex under the Foreign Exchange Management Act, 1999 (FEMA).
Here is the complete list of apps and websites placed on the Alert List by the RBI:
|Yup. Not.||Name||Web site|
|26||NTS Forex Trading||https://ntstradingrobot.com|
|30||TP Global FX||https://www.tpglobalfx.com|
The central bank also mentioned in the statement that unlisted applications or entities should not be considered authorized by the RBI. And that the list is not exhaustive and is based on what is known by the RBI.
According to RBI rules, foreign exchange transactions must be carried out only by authorized persons and for permitted purposes, under the terms of the FEMA (Foreign Exchange Management Act, 1999).
The RBI added: “While permitted forex transactions may be carried out electronically, they must only be carried out on ETPs authorized for that purpose by the RBI or on recognized stock exchanges such as National Stock Exchange of India Ltd., BSE Ltd. and Metropolitan Stock. Exchange of India Ltd”.
The central bank also mentioned that persons carrying out foreign exchange transactions for purposes other than those permitted by FEMA or on trading platforms not authorized by the RBI will be liable for legal action under FEMA.
Finally, some regulations on forex trading
Forex trading apps are becoming popular in India. OctaFX, an app on Alert list, is the sponsor of the IPL Delhi Capitals team. OctaFX, along with other forex trading apps, has been promoting itself on social media, Youtube, TV and print ads for some time now. And especially with the cryptocurrency hype dropping, these apps, with their get-rich-quick schemes, have increased YouTube ads and video collaborations. It should also be noted that some of these apps are also subject to data leaks.
But these platforms are operating for not following the legal requirements in India, and RBI called them and issued a warning for these apps, putting them on the Alert List.
Ideally, these apps should have been banned outright if they operated illegally in the country. India has banned many apps and games for many other reasons. If not banned, the common person would not know about these apps deemed illegal by the RBI and using them can cause legal action.