RBI warns against use of LRS scheme by individuals for forex trading on unauthorized platforms.

Country central bank RBI has warned people undertaking transaction for the purpose other than those permitted under the Foreign Exchange Management Act, (FEMA) or on unauthorized electronics trading platforms (ETPs) can face penal action under the Foreign Exchange Act.

Lots of unauthorized trading platform including some big names like OctaFX is under RBI’s scanner for offering forex trading. This warning came after an inter departmental group report showing that RBI received frequent queries from the public on online trading such as OctaFX, Olymp Trade, I-Forex, FBS, Expert Option, Binomo.com, AVA Trade, IQ Option, Alpari, Forex.com, and TP Global Forex, which offer foreign exchange trading facilities. The report said that some of these platforms promise high returns, bonuses, and rewards.

“None of these trading platforms are authorized by RBI. Nor are they recognized stock exchanges registered with Sebi (Securities and Exchange Board of India). As such, the services offered by these platforms are unauthorized,” the report said.

Under the Liberalised Remittance Scheme, all resident individuals, including minors, are allowed to freely remit up to USD 2,50,000 per financial year (April – March) for any permissible current or capital account transaction or a combination of both.