Banks told to enforce ban on card use for online forex trade--The Hindu
The Reserve Bank of India, on Tuesday, asked banks to close the accounts of customers using credit or debit card for online forex trading transactions, which are prohibited.
As and when any the bank comes across any prohibited transaction undertaken by its credit card or online banking customer, the bank will immediately close the card or account of the defaulting customer, the Reserve Bank said in a notification.
If it is observed that the bank concerned has failed to carry out the measures as outlined above, the RBI may proceed against the defaulting bank, it said.
Some banking customers continue to undertake online trading in foreign exchange on portals or websites offering such schemes wherein they remit funds from Indian bank accounts using credit cards or other electronic channels to overseas websites or entities, the central bank observed.
Subsequently, cash refunds are received from the same overseas entities into their credit card or bank accounts, it added.
Forex tradings through portals are mostly done on a margining basis with huge leverage or on an investment basis, where the returns are based on forex trading. The public is being asked to make the margin payments for such online forex trading transactions through credit cards or deposits in various accounts maintained with banks in India.
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