FOREX TRADING CLASSES IN CHENNAI
BY BEST TRADER AND TRAINER
MR. ARVIND 15 YEARS OF EXPERIENCE
Legal accessibility of Forex Trading is one of the most argumentative topics in India. RBI has maintained certain rules and regulations regarding forex trading. Investors must abide by the rules as the main objective behind these rules is to protect our people and country from loss. Before step into the main subject, according to RBI whether forex trading in India is legal or not, a basic background history regarding forex trading is essential. Therefore, let’s start with what the forex trading is and where did it come from.
Trade-in Forex market is done on the margin trading principles that means you can trade with a relatively smaller deposit for a bigger amount. In order to save foreign reserve and save country people from loss, RBI restricted forex trading. Previously, LRS (Liberalised Remittance Scheme) was 2 lac but now RBI restricts it with 70-75k. Without abide by these restrictions, trade-in Forex considers as illegal. Though, there are legal ways by which you can be attached with FX.
Legal route of doing Forex trade is to choose a SEBI registered dealer. You can do trade there with the help of a registered dealer. Authorized dealer list is available on SEBI website. Investors should beware of fake dealers in the FX. It is advisable to abide by RBI rules and regulation of Forex trade. If you want to know detail rules by RBI, can check the PDF file I have attached here.
It is a settled fact that no Indian citizen, as guided by SEBI and regulated by RBI in order to minimize risk incumbent in it, can undertake forex trading inside the Indian Territory through any electronic or online forex trading platform under any circumstances. By virtue of RBIs circular issued in 2013, forex trading through electronic or internet trading portals has been prohibited. However, forex trading is held legal when one does it through specified foreign exchange trading platforms and the base currency is INR (Indian Rupees). Simply put, the Indian Government has limited trading for Indian residents to only trade currency pairs which are bench-marked against INR (Indian Rupee).
As an Indian resident, as long as you are trading through any specified Indian Brokerage allowing access to Exchanges based in India such as the NSE, BSE, MCX-SX, and also provides access to currency derivatives, the transactions made for the trade is held entirely legal. Earlier, the only tradable instruments were EURINR, GBPINR, JPYINR, and USDINR. However, the Reserve Bank of India further, from 10th December 2015 onwards, allowed exchanges to offer cross-currency futures contracts and exchange-traded currency options in three more currency pairs namely, EUR-USD, GBP-USD, and USD-JPY
As I have mentioned earlier that when forex trading was introduced in India, there were only foreign brokers like FXCM, ALPARI, GCI, AVA, OANDA, etc. After restriction from the Reserve Bank of India, investors can trade in Forex but only through Indian SEBI registered broker. Now, at present all you need to trade in forex is to have a Demat account. Forex is legally allowed within Indian Exchanges, BSE, NSE, MCX-SX (Multi commodity exchange). Indian resident including banks, financial institutions, can do Forex trade in various currency pairs like EURUSD, GBPUSD, JPYUSD, USDINR, EURINR, GBPINR, etc.
RBI had noticed that advertisement issued by electronic / 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/ investment schemes & entice them with promises of disproportionate/exorbitant returns.
The Reserve Bank of India cautions the public not to remit or deposit money for such unauthorized transactions. The advice has become necessary in the wake of many residents falling prey to such tempting offers & losing money heavily in the recent past.
Yes, It is right still so many Indian peoples trading in overseas forex trading But actually they are in doing illegal activities. Nowadays RBI is very strict on this issue.
Yes, There is no restriction for NRI to trade in forex
However, Forex is the largest market in the world and there is no doubt about it but you should be cautious about choosing your step for trading in Forex. I hope you will be benefited by the article Forex Trading In India Is Legal Or Not.