Forex trading in India - Legal?. Here is RBI circular

[TraderDude]

Why you people are deciding forex trading is legal for individual residants.

Rbi is the deciding authority. The primary question is forex trading is illegal or not . Why you people going into the merits of rbi decission.

Here is the rbi decission.


Individuals cannot trade in forex market: RBI


PTI Feb 21, 2011, 10.14pm ISTTags:Reserve Bank|forex market
MUMBAI: The Reserve Bank today said resident Indians cannot trade in forex market as per the existing regulation.

The existing regulations under Foreign Exchange Management Act (FEMA), 1999, do not permit residents to trade in foreign exchange in domestic or overseas markets, RBI said in a statement.

The clarification of the RBI assumes significance in the light of several people losing heavily in forge trade through internet portals in the recent past.


It also said, remittance in any form towards overseas foreign exchange trading through electronic/internet trading portals is not permitted under the FEMA.

RBI cautioned investors against advertisements issued by certain electronic and internet portals offering trading or investing in foreign exchange with guaranteed high returns.

Many companies even engage agents who personally contact gullible people to undertake forex trading and investment schemes and entice them with promises of disproportionate or exorbitant returns, it said.


You will be punished,if you get caught,according to fema and money laundering act.



I repeat, iam not going into the merits of the decission.

Dear Prakash,

Firstly RBI cannot track the money used for forex trading. Let me give you a simple example.

My broker accepts LR. So i just convert my INR to USD LR and start trading. Once the money is converted to LR . RBI can no way track what the money is used for. if and when you make profits in forex. withdraw again to LR and send that money to your bank account. In all this transaction there is no way RBI can find out that you used that money to trade forex.

There are many loop holes my friend. How do you think the rich become even more rich...


Good luck :thumb:

 

[prakash2010]

Iam not stopping anyone doing forex. If rbi legalize and regulates,it would be fine for everyone.

Do you know any india based forex broker, offering trading in world indices such as hang seng index and dax.

 

[TraderDude]

Iam not stopping anyone doing forex. If rbi legalize and regulates,it would be fine for everyone.

Do you know any india based forex broker, offering trading in world indices such as hang seng index and dax.

It will be done in due time, until then pick any of reputed forex brokers and you can trade hand seng , dax and all other indicies.

as far as i know few indian brokers offer other indicies in ETF , which is not very liquid in india..

 

[Piratetrader]

Again, you have been misinformed , who is giving you this information.

If RBI say that about Forex, then they must not allow Stock trading also. But many people fall prey to indian stock market. RBI should caution against that and ban stock trading..

And any trader who is willing to risk money in any kind of trading know forex trading is no different than stock trading.

Infact i will say this forex trading is less risky than stock trading. Why? because in forex
1. More liquidity than stocks
2. Traded 24/7

Sooner or later the indian public will want a piece of forex trading and RBI/SEC will regulate it. It's just a matter of time.

This information is provided by the rbi itself and its there on their website ...............but its just probably to scare people! millions of people are trading from India just to give you information on etoro broker there clients are 40% from India !! After all SG sir is also trading there and his equity and profits are "HUGE" .. and I haven't even heard of a single person who has been punished or faced any problem trading forex. if anyone has share it here ! and so I think there should not be a problem, btw I don't know that that stock index option djia, s&p 500, gold,sugar,wheat futures trading fall under this scheme or not !!

 

[nifty5010]

sir, pls suggest me the broker for forex !

 

[pradeep221899]

please visit this site http://www.rbi.org.in/scripts/NotificationUser.aspx?Mode=0&Id=6336

 

[fxgood]

Trading CFDs is legal or illegal any one know about it more clearly from legal points of view sir

 

[TraderDude]

please visit this site http://www.rbi.org.in/scripts/NotificationUser.aspx?Mode=0&Id=6336

This can be bypassed.

Simply convert your INR to LR in USD. After that it can be used for anything like forex trading.

LR is liberty reserve. RBI does not own LR an is outside of india's jurisdiction.

So what stops anyone from trading forex. I have shown you how to trade forex legally now.

Can we please put this to rest.

ONCE AGAIN I M REPEATING, YOU CAN TRADE FOREX LEGALLY. JUST BYPASS THE FEMA ACT.

 

[charts trader]

something we can do, perhaps

The self appointed guardian of our interest RBI cares for our losing money on margin trading and does not permit funding even futures account with any US broker even for CBOT or Nasdaq or NYE instruments.

I was thinking if we, as a group, write letters to NFA and US Trade Representative explaining the situation, they should be willing to take up the issue with Indian govt. as it can bring lot of business to US brokers.

RBI is least bothered about retail traders as the decision making babus get fixed fat salaries and free accommodations. They don't care about foreign exchange lost in a 350 crores failed rocket lost in bay of Bengal with 95% imported components but are extremely concerned in retail forex traders lossing few hundred dollars!

 

[prakash2010]

margin trading is legal according to rbi at overseas exchanges.

you can trade in global equities, f&o .

It has been mentioned in overseas trading page at icici ,kotak, iifl securities web page.

I even contacted them.its legal.

Minimum amount required to open a overseas trading account is 2 lakh rupees.
Under the liberalize remittance scheme ,it has been mentioned with certain limit.

Do not know about forex.