What changed
RBI issued a circular on April 24, 2024, highlighting that unauthorised entities are using local agents and bank accounts to collect funds for illegal forex trading. Banks are now explicitly required to report any such accounts to the Directorate of Enforcement and proactively publicise lists of authorised forex dealers and platforms.
What it means for you
Banks must tighten monitoring of accounts for unusual forex-related transactions, especially those not matching stated purposes. Failure to detect and report such accounts could lead to regulatory scrutiny. This also reinforces the need for customer awareness campaigns to prevent residents from falling prey to illegal forex schemes.
What you must do
- Review account opening and transaction monitoring processes to identify accounts used for unauthorised forex trading.
- Report any suspicious accounts facilitating unauthorised forex trading to the Directorate of Enforcement immediately.
- Educate customers through notices and communications to deal only with RBI-authorised persons and ETPs.
- Publicise the RBI's Alert List and press releases on unauthorised forex platforms to customers and branches.
Who it affects
Authorised Dealer Category-I Banks, Bank branches handling retail and trading accounts, Customers dealing in forex or receiving forex-related offers
What should we do if we find an account being used for unauthorised forex trading?
You must report the account to the Directorate of Enforcement, Government of India, for further action as deemed fit.
How can we help customers avoid unauthorised forex platforms?
Advise customers to deal only with RBI-authorised persons and ETPs, and share the Alert List and press releases available on the RBI website.