Is foreign currency pair such as GBP/USD, EURO/USD et., trading in forex market by an Indian living in India illegal? Is there any circular issued by RBI that makes forex trading illegal? Is ZXMARKETS.COM an authorised, registered and allowed forex broker in India?
Before answering this question, I would like to inform you that the answer would contain only the legal aspects pertaining to forex trading and would not go into the technicalities of forex trading.
Currency pairs such as GBP/USD, EURO/USD etc. cannot be used in the forex market by an Indian living in India. Currently, four pairs can be traded in the futures market viz. rupee-dollar, rupee-pound, rupee-yen and rupee-euro. It needs to be noted that such transactions are allowed only in domestic stock exchanges like NSE, MCX-SX and BSE.
In a circular issued by the RBI, it was stated that margin payments for online trading transactions are in violation of Foreign Exchange Management Act, 1999 (https://www.rbi.org.in/scripts/NotificationUser.aspx?Id=8427&Mode). Apart from that, violation of these rules is a non-bailable offence. So, any margin payments made overseas even with INR pairs are illegal. So, forex trading is limited to only the four pairs mentioned above and is allowed only in domestic stock exchanges.
Coming to zxmarkets.com, while there is no authentic source to figure out whether it is a registered forex broker or not, we could rely on reviews of various people which have called the company a fraud. There have been a lot of complaints registered against zxmarkets.com (http://www.consumercomplaints.in/zx-markets-b107868 & http://www.consumercomplaints.in/zxmarketscom-fraud-c988493) with accusations that they don’t even have an office in India and all the telephonic conversations are from Sri Lanka. If you have experienced issues relating to money with zxmarkets.com, the can be classified as frauds under Chapter 2.2 as per Master Directions on Frauds-Classification and Reporting by commercial banks and select FIs.
Now, before you go for forex trading, you need to know that there are no licensing authorities in India who license or regulate Forex Brokers unlike countries like Cyprus and United Kingdom who do have a licensing authority. You need to be aware of the broker you choose for forex trading and the only way you could make an informed choice is by knowing the complicated nature of forex trading in India which involves only four pairs and is allowed only in domestic stock exchanges. Apart from that, you need to conduct a thorough background check of the Broker you choose for forex trading.
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