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RBI Tightens Screws on Forex Traders on Online Websites

The Reserve Bank of India, after getting sick of telling banks to please not allow their clients to transfer money to forex trading accounts (forex trading outside India is not allowed for Indian residents) has decided to step it up a notch.

Now they’ve said that any bank that detects such a transaction – a payment or receipt from an online forex trading company – will immediately close the credit card and bring it to RBI’s notice. A bank that doesn’t do so will be penalized by RBI.

Forex trading by Indian residents is only allowable onshore. You can’t transfer money into a “margin account” outside India – even for stock trading, and this is because the rupee isn’t fully convertible. One of the reasons this circular comes now is because now is when the RBI is trying to stem the outflow of dollars from the country.

I believe such a rule is retrograde, and that we should free the rupee. However, as long as the rupee is not free, the RBI will try to create barriers that seem overly authoritative but are based on our feeling that we should “control” the environment. The freedom of the rupee, though, is not an RBI thing – it has to be passed through parliament.

  • Raja says:

    RBI not like Indian currency to convert dollars and then use those converted dollars for trading.
    Ok I will not use Indian currency to trade.
    But I have an idea!
    For an Example if I earn dollars form freelancing sites and i use that money for Forex trading.
    If RBI allow this method to trade it is very useful for all Indian’s.
    Lots of countries are allowing forex trading.
    I am also ready to pay tax for Forex Trading.
    (I think, In author country Forex trading is tax Free).
    I can 100% say that non Indian & some of Indian people are making money from Forex trading.
    (I found this info on Internet).
    I will not trade in Forex until RBI gives Green signal to Forex trading.
    The main Advantage of Forex trading is
    24-hour Trading
    Up to 1:1000 Leverage (some Forex brokers)
    Free Demo account to learn Forex trading withou any risk of money.
    Future trading has no advantage like Forex trading
    I hope our Indian government will fix this issues soon.