Forex trading in India Scam?
Many a times, we come across discussions questioning the legality of currency trading also known as Forex trading in India. It does create an element of doubt in the minds of potential investors and also young entrepreneurs who wish to step in and earn from this market.
Well I hope that this article will surely help you in clarifying your doubts about the legality of Forex trading in India. In the beginning I will like to tell you that Forex trading in India is completely legal if you follow a proper channel. Mind my words ‘If you follow a proper channel.
Start with opening your Forex account with some registered broker or brokerage firm (Angel Broking, Nirmal Bang, SMC broker) they will not only help you in understanding the market but will also help you with your investments and will also act as a legal guide . Now for trading in Forex you have to convert the INR (Indian Rupees) to the desired currency you want to trade i.e. the currency which you choose to be the base currency in your trading. Supposing you are investing US dollars to buy Japanese Yen, then USD becomes your base currency. Reserve Bank Of India (RBI) has greatly relaxed the foreign exchange rules in the past few years and now a citizen with Indian nationality even minors are allowed to make an exchange of rupees for up to 2,00,000 US $ per year without giving any justification to the government about it .There is no restriction on the frequency of exchange in a financial year .This has been done under the Liberalized Remittance Scheme (LRS) .
RBI Advisory on Overseas Forex Trading in India through Electronic/Internet Trading Portals
Date: February 21, 2011
Reserve Bank of India has made it clear that remittance in any form which is towards overseas foreign exchange trade through electronic trading portals is not allowed under the Foreign Exchange Management Act (FEMA), 1999. The RBI has also made it clear that the existing regulations under FEMA, 1999 do not permit residents of India to trade in foreign exchange in domestic and overseas markets.
The banks has created and circulated this kind of email to every client once they open the saving/current account in a bank.
Important message for customers:
- Overseas Forex Trading through internet trading portals
- As per RBI guidelines, sending money overseas for foreign exchange trading using internet trading portals is strictly prohibited.
- Use of Credit Cards, Debit Cards, Forex Cards or bank accounts are not permitted for this purpose – either directly or indirectly.
- The Bank will be forced to close any account or card where such transactions occur. For further details click here
Residents of India are, however, granted permissionto trade in currency futures or options contracts, traded on the stock exchanges which have been given recognition by the Securities and Exchange Board of India (SEBI) in India, subject to the terms and conditions mentioned by the Reserve Bank which may change from time to time.
So one thing that is clear that Forex trading by individuals in India is not permissible by Indian Government. However the amount of USD 2,00,000 can be utilized for Forex trading and moreover if your broker provides you with a high leverage then you can trade by investing only a small amount . Finally we conclude that it is legal if you follow the right channel i.e. you have to make it legal.
In year 2008 India’s new stock exchange is formed MCX-SX (MCX Stock Exchange Ltd) through which official forex trading platform is given to its client.
The MCX-SX started with monthly contracts in USDINR pair and then expanded its currency derivatives. The above diagram shows example of chart for the 21 May 2012 (Forex Trading In India). Following points need to be considered are
- Open you Forex trading account from the Broker who has certified from SEBI + RBI, you can get this verification from here SEBI+RBI approved broker
- We are providing accounts through Nirmal Bang & SMC broker
- Proving Intra day brokerage of 15rs per lot.
- We do have offline trading on be-half of you which will give you 3% returns on per month basis.
- Leverage is 1:50, we have tricks where your leverage will increase (Forex Trading in India)
Those who are interested to grab this opportunity Forex trading in India please fill in the details below.
Now I hope by this time you must have understood is it legal or illegal? And if it so still how come people from India are doing this, How come I receive calls from different Fx Trading companies to open the trading account .. so on. Then read the below post it shows how Indian traders are trading in International currencies.