Home › Circulars › RBI/2008-09/126

RBI Warns Public Against Fake Foreign Fund Offers

No longer current — withdrawn, no replacement on file yet

Source: Reserve Bank of India · RBI/2008-09/126 · issued FY 2008-09 · ~1 min read

Quick answerRBI cautions against fictitious lottery and money circulation schemes promising cheap foreign funds. Remittances for such schemes are prohibited under FEMA. Urban co-op banks must inform customers about these risks.

What changed

RBI issued a circular to all Primary Urban Co-operative Banks, reiterating that remittances for lottery or money circulation schemes are illegal under FEMA. It references a December 2007 press release and directs banks to alert customers about such fraudulent offers.

What it means for you

Banks must ensure customers are aware that sending money abroad for lottery or prize schemes is prohibited. This protects customers from fraud and helps banks avoid regulatory penalties for facilitating such transactions. Non-compliance could lead to FEMA violations.

Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.

What banks were required to do at the time

Bring the contents of the RBI press release to the notice of customers.

Who it affects

Primary Urban Co-operative Banks, Customers of urban co-op banks

❓ Common questions

Regulatory timeline

Decoded by BankPulse 2026-06-19 12:49 IST
repealed_by — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
Status change: withdrawn 05 Aug 2026, 04:00 IST

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

What types of schemes are covered by this prohibition?

The circular covers lottery schemes, money circulation schemes, and any scheme under different names that involves remittances for securing prize money or awards, as these are prohibited under FEMA.

What should a bank do if a customer insists on sending money for such a scheme?

The bank should explain the legal prohibition under FEMA and refuse the remittance. Staff should be trained to handle such requests and advise customers about the fraudulent nature of these offers.

Is this a new regulation?

No, this circular from August 2008 reiterates existing FEMA provisions and references a December 2007 press release. It serves as a reminder for banks to remain vigilant.

📜 This document’s life story (1 recorded event, each backed by RBI’s own words)

Repealed by RBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)

RBI’s words: “Official withdrawal register entry #2135: UBD.PCB.Cir.No.6/12.05.000/2008-09 — "RBI Cautions Public Against Fictitious Offers of Remitting Cheap Funds from Abroad" dated August 12, 2008”

📜 Read the original circular — full text as issued by RBI

RBI/2008-09/126 
UBD.PCB. Cir . No.6/12.05.000 /2008-09
 August 12 , 2008
 The Chief Executive Officer of
 All Primary (Urban) Co-op. Banks
 Dear Sir/Madam
 RBI cautions Public against Fictitious offers of 
 Remitting cheap funds from abroad 
 As you may be aware, fictitious lottery and money circulation schemes aimed at defrauding members of the public have come to light from time to time. It is clarified that remittances in any form towards participation in lottery schemes is prohibited under Foreign Exchange Management Act, 1999. Further, these restrictions are also applicable to remittances for participation in lottery-like schemes functioning under different names, such as money circulation scheme or remittances for the purpose of securing prize money/awards etc. We invite a reference in this connection to a Press Release on the subject dated December 7, 2007 issued by the Reserve Bank of India (copy enclosed ). You are advised to bring the contents of the press release to the notice of your customers. 
 Yours faithfully
 ( A.K. Khound )
 Chief General Manager-in-Charge

Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2008-09/126 · issued FY 2008-09. The plain-English explanation above is BankPulse’s own independent summary.

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BankPulse Compliance Evidence Pack — generated 05 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly).
Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=4414&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.