RBI issues “alert list” signalling investors of 48 unauthorized platforms

Recently, the Reserve Bank of India has updated the Alert list on the unauthorized forex trading platforms for the public. The list includes the names of the entities, media, or websites which promote such entities. Previously, in September, the central bank published an Alert list containing 34 such entities.

Presently, the alert list consists of 48 such platforms.

The RBI has stated that the alert list was updated and included the names of platforms, entities, or ETPs, which involves the advertisements of unauthorized entities or claiming to be providing training or advisory services. They have further mentioned that the alert list is incomplete and new entities may be added.

They have made it clear that if an entity does not appear in the list presented by the RBI, it does not mean that it has been approved by the RBI to conduct a foreign exchange or can operate electronic trading platforms for forex transactions.

The authorization of any entity or Electronic Trading Platform can be determined from the list of authorized persons and authorized electronic trading platforms that are available on the RBI’s website.

The residents must be cautioned about the utilization of such entities or platforms that appear to be promoting such unauthorized ETPs, which involves the advertisements of unauthorized entities or one which claims to provide advisory or training services such as in social media or video streaming sites. They may provide demo trading in stimulated environments and other indirect means to allow forex trading through unauthorized services.

The RBI has further mentioned that any person would be subjected or liable for penal action under the rules and regulations of the FEMA if he or she is found to remit or deposit funds directly or indirectly in Indian rupees or any other currency for conducting forex transactions for purposes that are not permitted by the FEMA or ETPs.

The Alert List contains names of the entities that are not allowed to deal in forex transactions under the Forex Exchange Management Act (FEMA) in 1999 nor authorized to conduct an Electronic Trading platform (ETP) for forex transactions under the policy of the Electronic Trading Platform Reserve Bank directions 2018. The list has been made based on what is known to RBI at the time of publication. The list includes entities such as Alpari, AnyFX, Ava Trade, Binomo, eToro, Expert Option, FBS, Foxorex, HotForex, and many other platforms. 

The RBI has further mentioned that permitted forex transactions even though are conducted electronically, must be conducted in authorized ETPS for the National Stock Exchange, BSE Ltd, RBI, and the Metropolitan Stock Exchange of India. 

Ideally, such authorized apps must be banned if they are operated illegally in the nation. Previously, India has many such apps and sites for multiple reasons. If the apps are not banned, the common investors will not know if the apps are marked unauthorized by the RBI, and using them for transaction purposes can cause legal action.

Recently, the Indian government issued an order to ban 94 loan applications. Indian apps from Indian companies were included in the list, according to reliable sources.

The website for LazyPay has been blocked by the Ministry of Electronics and Information Technology. The program is a Buy Now, Pay Later PayU platform. The latter is owned by Naspers, a South African company with Dutch roots.

The application has been blocked following orders from the Ministry of Electronics and Information Technology as a result of the IT Act, according to LazyPay’s website.

However, the IT ministry’s request for a ban on such applications has not yet been supported by evidence.

The IT Ministry has even demanded that a ban be placed on Kissht, a different lending platform, making it unavailable to Indian users.

An important Chinese conglomerate called Fosun previously owned more than 17% of the lending platform, but it has since sold those shares to the Singaporean government.

In response to the ban imposed by the Indian government, PayU has spoken with reliable sources who claim that a few Internet service providers are currently unable to access the application and websites. The authority is making every effort to fix the problem.

Ranvir Singh, the founder of Kissht, has spoken about the situation and said that Meity will be contacted by the business to address it as soon as possible. The ban will affect lakhs of the company’s customers. They won’t be able to claim credit for successful endeavors, thanks to the ban.

RBI’s alert list of the top 19 unauthorized platforms has been provided below:

Edited by Prakriti Arora