Indian Central Bank Gets Tough with FX Traders Using Credit or Debit Card

Following its strong stance taken against Online Trading Online Trading Online trading represents the trading of fiat currencies, digital currencies, commodities, stocks and indices, where traders and investors intend to make a profit, via the purchase or sale of the aforementioned products. This is done through an electronic network, made accessible by brokers in the form of an online trading platform or hub.Online trading continues to see a rapid growth year on year, due to a number of reasons. Firstly, the number of brokers offering their services, with more mone Online trading represents the trading of fiat currencies, digital currencies, commodities, stocks and indices, where traders and investors intend to make a profit, via the purchase or sale of the aforementioned products. This is done through an electronic network, made accessible by brokers in the form of an online trading platform or hub.Online trading continues to see a rapid growth year on year, due to a number of reasons. Firstly, the number of brokers offering their services, with more mone Read this Term in the global FX markets in India. The country’s central bank has issued a further notification aimed at banks, demanding the closure of individual's bank accounts if they are found guilty of trading in FX, by transferring their funds in the $5.3 trillion a day asset class.

The move comes after the Reserve Bank of India (RBI) has been on the back foot, post rupee crisis. The central bank has been issuing more notifications over the last six months than ever before, as pressure builds up on the economy.

According to the notification issued this week, banks are required to exhibit extra scrutiny in relation to foreign transactions. Once the bank comes across any prohibited transaction undertaken by their customer via the credit card or on-line banking, the bank will immediately close the card or account of the defaulting customer, the Reserve Bank said in a notification.

If banks fail to observe the new rulings, they could face harsh consequences, the RBI states that it, “May proceed against defaulting the bank”.

India has emerged as an ideal destination for on-line traders, the nation of 1.2 billion people has over 25 million registered DEMAT (share dealing) accounts, and is home to a flurry of financial trading exchanges.

Traders from India prefer global FX and CFD products, due to the numerous advantages against domestic products, these include:

• Low entry costs
• Leverage Leverage In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders Read this Term
• Variable transaction sizes
• 24/5 markets
• Sophisticated trading platforms

Several brokers offer solutions for Indian customers either through a direct Indian specific domain, or with local language websites.