forex trading illegal for resident indians

Individuals cannot trade in forex market: RBI


PTI Feb 21, 2011, 10.14pm ISTTags:Reserve Bank|forex market
MUMBAI: The Reserve Bank today said resident Indians cannot trade in forex market as per the existing regulation.

The existing regulations under Foreign Exchange Management Act (FEMA), 1999, do not permit residents to trade in foreign exchange in domestic or overseas markets, RBI said in a statement.

The clarification of the RBI assumes significance in the light of several people losing heavily in forge trade through internet portals in the recent past.


It also said, remittance in any form towards overseas foreign exchange trading through electronic/internet trading portals is not permitted under the FEMA.

RBI cautioned investors against advertisements issued by certain electronic and internet portals offering trading or investing in foreign exchange with guaranteed high returns.

Many companies even engage agents who personally contact gullible people to undertake forex trading and investment schemes and entice them with promises of disproportionate or exorbitant returns, it said.

Hey, thanks for sharing the information, I was actually thinking of Forex for investment.

I am not really sure. Most of the forex brokers offer OTC derivatives not exactly physical trading. They are based on interbank rate supplied to the broker. Moreover OTC is unregulated and the only risk is that your broker will go bust and you will get stuck with money like what happened to MF global.