India’s Central Bank Adds Two Prop Firms And ThinkMarkets To Warning List
Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.
The Reserve Bank of India (RBI) has added more companies to its warning list. This list now includes two prop trading businesses Smart Prop Trader and FundedNext and a well-known broker named ThinkMarkets. This is the first time the Reserve Bank has focused on prop trading companies. The warning list already has many famous brokers like eToro, XTB, and IC Markets.
The Reserve Bank says the list has names of companies that are not allowed to deal with forex under the Foreign Exchange Management Act of 1999 (FEMA). The list also contains firms that are not permitted to run electronic trading platforms for forex under the Electronic Trading Platforms (Reserve Bank) Directions, 2018.
Certain Firms On The List Provide Unauthorized Access To The FX Market
The list may also have companies that offer illegal access to the FX market or say they provide advice and training to individual investors for trading.
Interestingly, many companies on this list do not even provide services in India. In 2022, a number of popular companies were added to this warning list. Different brokers were interviewed and they said they do not operate in India. eToro asserted that it does not take clients from India, and XTB noted that it is not operating there and does not offer services to Indian residents.
India does not fully regulate or stop retail over-the-counter (OTC) markets. This situation lets many CFD and forex brokers target people in India. However, customers break local forex laws, like FEMA, by accepting deposits on these platforms that are not allowed in India.
The broker OctaFX had trouble with the Indian central bank too, which took nearly $10 million after the broker allegedly made nearly $120 million in local operations. Despite this, new companies keep coming into the market.
RBI Announced That It Sold $6.49 Billion In Foreign Currency In August
Last month, Axi, a forex and CFD broker from Australia, opened a new office in Bangalore, India. This office has about 30 staff and is led by Axi’s head of engineering in the area, with plans for more growth in the coming months.
Earlier this week, the Reserve Bank of India (RBI) shared that it sold more US dollars than it bought in August. This was a change from July when it had bought more dollars than it sold.
The RBI sold $6.49 billion worth of foreign currency in August. According to the central bank’s monthly report, it purchased $16.14 billion but sold $22.63 billion of foreign currency. In July, the RBI bought $6.93 billion in the spot market.
The Reserve Bank of India is India’s central bank. It is responsible for controlling the Indian banking system and is owned by the Ministry of Finance, Government of India. The RBI controls and issues the Indian rupee, manages the country’s payment systems, and works to help the economy grow.
