Hi!
As per the RBI, forex trading is illegal.
The Reserve Bank of India has today clarified that remittance in any form towards overseas foreign exchange trading through electronic/internet trading portals is not permitted under the Foreign Exchange Management Act (FEMA), 1999. The Reserve Bank has also clarified that the existing regulations under FEMA, 1999 do not permit residents to trade in foreign exchange in domestic / overseas markets.
http://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=23941
I just had a chat with forex4u.com representative:
18:25framebuffer: is forex trading allowed in India?
18:25framebuffer: According to RBI its not allowed to trade foreign currencies
18:25framebuffer: is this true?
18:25Anna Garibjan: RBI does not permit Indian residents to trade in currency pairs except INR. Please turn to the RBI's official website http://www.rbi.org.in for first-hand information, as even though Forex4you does it's best to follow current legislation in different countries, it's sometimes practically impossible to update the information in a timely manner. You may seek further clarification on this from your financial adviser or Chartered Accountant.
18:27framebuffer: Its very confusing, I have been to RBI website but they have clearly mentioned that its not allowed.
18:27framebuffer: http://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=23941
18:27framebuffer: But then how come people are doing it? Like alpari, reliance money and yourself?
18:27framebuffer: Can indian paiers be traded?
18:28Anna Garibjan: you cannot trade only INR, there have to be 2 currencies involved
18:29framebuffer: I know, i wrote indian pair...to pair with USD etc
18:29framebuffer: Its vey confusing
18:29framebuffer: I dont want to end up in jail
18:29framebuffer: where can we get some definative answers as everone, including CAs etc dont know
18:30Anna Garibjan: We cannot give you a legal advice on this. It is our clients' responsibility to make the decision whether to trade or not
18:31framebuffer: I understand that, but since you are running the operations, you must be having some idea..thats all. I want to be sure that its allowed
18:32Anna Garibjan: according to RBI as far as we are informed it is not allowed
18:32framebuffer: Then how come Reliance money, Alpari and you are doing it?
18:32framebuffer: just curious
18:33framebuffer: what if you get caught?
18:33framebuffer: what is the panelty?
18:33framebuffer: maybe i will take a risk
18:33framebuffer: if the panelty is low
18:34Anna Garibjan: the penalty, if any, will not be against the company, but against the customer who took that risk
18:34framebuffer: ok
18:34framebuffer: i understand
18:34framebuffer: but it will be informative to know it, so we can take the risk
18:35framebuffer: if its like a non-bailable offence with 25 years in jail, then its not worth it
18:35framebuffer: if its a small fine, like 50k, then one can take the chance
18:35framebuffer: Has anybody been caught?
18:35framebuffer: so we can know what happened to him
18:35Anna Garibjan: We do not know what kind of penalty you may risk
18:36framebuffer: Thanks Anna, you have been helpful. Thanks for honest answers. I will try to learn more about the punishment.
18:37Anna Garibjan: You are welcome. Is there anything else I may assist you with?
18:37framebuffer: No, that it. Thanks.
So what should we do? What are the risks in the future for getting caught? And is it worth taking the risk?
Thanks.
As per the RBI, forex trading is illegal.
The Reserve Bank of India has today clarified that remittance in any form towards overseas foreign exchange trading through electronic/internet trading portals is not permitted under the Foreign Exchange Management Act (FEMA), 1999. The Reserve Bank has also clarified that the existing regulations under FEMA, 1999 do not permit residents to trade in foreign exchange in domestic / overseas markets.
http://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=23941
I just had a chat with forex4u.com representative:
18:25framebuffer: is forex trading allowed in India?
18:25framebuffer: According to RBI its not allowed to trade foreign currencies
18:25framebuffer: is this true?
18:25Anna Garibjan: RBI does not permit Indian residents to trade in currency pairs except INR. Please turn to the RBI's official website http://www.rbi.org.in for first-hand information, as even though Forex4you does it's best to follow current legislation in different countries, it's sometimes practically impossible to update the information in a timely manner. You may seek further clarification on this from your financial adviser or Chartered Accountant.
18:27framebuffer: Its very confusing, I have been to RBI website but they have clearly mentioned that its not allowed.
18:27framebuffer: http://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=23941
18:27framebuffer: But then how come people are doing it? Like alpari, reliance money and yourself?
18:27framebuffer: Can indian paiers be traded?
18:28Anna Garibjan: you cannot trade only INR, there have to be 2 currencies involved
18:29framebuffer: I know, i wrote indian pair...to pair with USD etc
18:29framebuffer: Its vey confusing
18:29framebuffer: I dont want to end up in jail
18:29framebuffer: where can we get some definative answers as everone, including CAs etc dont know
18:30Anna Garibjan: We cannot give you a legal advice on this. It is our clients' responsibility to make the decision whether to trade or not
18:31framebuffer: I understand that, but since you are running the operations, you must be having some idea..thats all. I want to be sure that its allowed
18:32Anna Garibjan: according to RBI as far as we are informed it is not allowed
18:32framebuffer: Then how come Reliance money, Alpari and you are doing it?
18:32framebuffer: just curious
18:33framebuffer: what if you get caught?
18:33framebuffer: what is the panelty?
18:33framebuffer: maybe i will take a risk
18:33framebuffer: if the panelty is low
18:34Anna Garibjan: the penalty, if any, will not be against the company, but against the customer who took that risk
18:34framebuffer: ok
18:34framebuffer: i understand
18:34framebuffer: but it will be informative to know it, so we can take the risk
18:35framebuffer: if its like a non-bailable offence with 25 years in jail, then its not worth it
18:35framebuffer: if its a small fine, like 50k, then one can take the chance
18:35framebuffer: Has anybody been caught?
18:35framebuffer: so we can know what happened to him
18:35Anna Garibjan: We do not know what kind of penalty you may risk
18:36framebuffer: Thanks Anna, you have been helpful. Thanks for honest answers. I will try to learn more about the punishment.
18:37Anna Garibjan: You are welcome. Is there anything else I may assist you with?
18:37framebuffer: No, that it. Thanks.
So what should we do? What are the risks in the future for getting caught? And is it worth taking the risk?
Thanks.