Forex Trading

Querist : Anonymous (Querist) 18 May 2010 This query is : Resolved
Hello,

I am resident of India. I am planning to do Forex trading with a Swiss company. I went to Axis Bank and came to know that money remittance is not allowed for Forex trading purpose. I inquired with HDFC bank and they told the money can be transferred to my overseas broker. I am confused because of 2 different answers from the banks. I need to know the following:

1. Is Forex (Foreign Currency) trading allowed for resident of India with a Foreign broker?
2. If remittance is not allowed, can I still deposit money by asking my friend to do it from USA and still do the trading?
3. What are the implications if I go ahead with remittance with HDFC bank?

The deposit amount is $2000 USD.

Please help me in clarifying my doubts. Appreciate all the help in advance.

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Raj Kumar Makkad (Expert) 18 May 2010
The amount to be deposited is very meager so take the help of HDFC as this bank is an international bank and it provides all type of services and those are permissible by RBI including FOREX tading transfer but Axis bank is a private bank and has no permission at par with HDFC. Otherwise also, FERA is applicable in India and its provisions are adhered to which requires registration with even RBI.

Parthasarathi Loganathan (Expert) 18 May 2010
FERA has already been replaced by FEMA

Querist : Anonymous (Querist) 18 May 2010
Thank you very much for the quick reply.

Just going through internet on the same matter. In the below RBI FAQ, the FAQ number 34 states that "However, it is clarified that remittance from India for margins or margin calls to overseas exchanges / overseas counterparty are not allowed under the Scheme". The Forex trading is a margin call in nature. Please find the link to RBI FAQ

http://www.rbi.org.in/scripts/FAQView.aspx?Id=53

I am not sure whether this is an old FAQ or the latest one. If I remit the money then will it come under LRS (Liberalised Remittance Schem) scheme?

If yes, do you still suggest me to go ahead with HDFC bank as it provides more service?

Please help me.

Raj Kumar Makkad (Expert) 19 May 2010
You should avail the services of HDFC rather invoking lengthy options as your amount is very small.

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