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Forex and currency
FEMAvideshi mudra ka kanoon
The Foreign Exchange Management Act, 1999, the Indian law governing foreign currency transactions and the reason overseas forex trading is restricted.
FEMA, the Foreign Exchange Management Act of 1999, is the law under which the RBI regulates how Indian residents deal in foreign exchange. It covers sending money abroad, receiving it, holding foreign assets and trading currencies. Under FEMA and RBI directions, Indian residents may trade currency derivatives only on recognised Indian exchanges, in INR pairs. Trading forex on margin through overseas online brokers is not allowed, and using money sent abroad under the Liberalised Remittance Scheme for such trading is a FEMA violation. RBI periodically publishes an alert list of unauthorised forex trading platforms. Penalties can be up to three times the amount involved. If an advertisement promises forex trading with 500 times leverage in dollars, it is operating outside FEMA. The legal route for an Indian learner is USD/INR and similar contracts on NSE, BSE or MCX-SX.
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