Increase monitoring and inform the ED and banks about illicit FX transactions
On Wednesday, the RBI requested that banks be more watchful in order to stop unapproved foreign exchange transactions via banking channels and to promptly report any such cases to the Enforcement Directorate (ED).
The Reserve Bank of India said in a circular that it has seen cases where unapproved organizations have promised Indian citizens excessive or extravagant profits when they provide foreign currency (forex) trading services.
According to the RBI, “investigation has revealed that these entities have resorted to hiring local agents who open accounts at various bank branches for collecting money towards the margin, investment, charges, etc. in order to facilitate unauthorised forex trading.”
The apex bank said that these accounts are created in the names of private persons, businesses, and trading companies, and that in several instances, the transactions in these accounts are shown to be inconsistent with the claimed reason for forming the account.
Additionally, the central bank said that these organizations are giving citizens the ability to remit or deposit money in rupees in order to conduct unauthorized foreign exchange transactions using domestic payment methods such internet transfers and payment gateways.
The circular said that more vigilance is required to stop the improper use of banking channels to enable unauthorized currency trading.
