Investing and trading is no more a hassle. With smartphones and easy internet access, people can trade from anywhere, anytime. However, with this easiness comes the danger of unauthorised & banned forex trading apps in India.
Now, scammers generally promote these apps through flashy ads displaying high returns or guaranteed profits.
But in reality, such apps are not regulated by any of the regulatory bodies; SEBI or RBI in India.
Among multiple unauthorized trading apps, the major ones are those that allow trading in forex. Let’s get into the details to understand the difference between legality & illegal forex trading apps in India.
Understanding the Legality of Forex Trading in India
In India, SEBI and stock exchanges allow trading in some of the currency pairs, that includes USD, EUR, GBP, & JPY. These currency pairs are also traded under strict guidelines and rules.
However, illegal forex trading apps bypass these regulations allowing traders to trade in international forex pairs, which are prohibited in India.
RBI Banned Forex Trading Apps
With the rise in unauthorised forex trading fraud cases, RBI released a list of 40+ forex trading apps that are banned in India.
Traders must understand that forex trading involving currency pairs outside those approved by RBI is not legal in India.
RBI has consistently warned people of the risk involved in trading such apps:
- Illegal Operations: The first and foremost reason is quite straightforward, none of the unauthorised apps are regulated in India.
- Investors’ Protection: Now the app provider generally lures people by showing high returns and low risks. Investors in the greed of making huge returns generally neglect to see the major risks of getting scammed behind these ads & promotions.
- To Prevent Identity Theft: Most of the time, scammers generally steal away the details and IDs investors upload at the time of registration and misuse them to do financial scams or use them to execute other big crimes and fraud, leaving a long-lasting impact on the victim.
Recently, major actions have been taken against such platform involved in forex trading or another form of unauthorized trading in India. SEBI has also actively participated in this where it has blacklisted most of the cryptocurrency apps.
RBI Banned Forex Trading Apps List
Here is the list of all forex trading apps that have been identified as illegal and banned by SEBI.
How to Identify Illegal & Banned Trading Apps in India?
Telegram and social media are the major platforms to promote such apps in India. Fake finfluencers use authority bias to manipulate their followers by showing fake PnL screenshots.
They make videos to promote such apps and make groups in Telegram where they lure their audience by displaying fake PnL screenshots.
Not able to catch the scam, most people fall victim to the scam, eventually losing hard-earned money. Now getting scammed using such trading apps leads to financial distress and also makes victims vulnerable to RBI penalties.
According to the Foreign Exchange Management Act (FEMA), 1999, forex trading is legal only through authorized dealers and recognized exchanges.
Any trading conducted outside these channels is considered illegal and may result in penalties in different forms.
- Monetary Fines – Under FEMA, individuals found trading on illegal forex platforms can face penalties of up to ₹10,000 per day for continuing violations.
- Frozen Bank Accounts – Banks have the authority to freeze the accounts of individuals engaged in unauthorized forex trading.
- Legal Action – In severe cases, violators may face legal proceedings, including invasion of profits made through illegal forex trading.
- Restricted Foreign Transactions – Traders caught using unauthorized forex apps may be restricted from making further foreign transactions.
Now to avoid such penalties & consequences it is important to be more alert and look for ways to identify such apps.
1. Check for RBI & SEBI registration
- RBI regulates forex trading in India and trading in those forex pairs is allowed only on the authorized brokers’ platform.
- SEBI does not allow trading in currency pairs beyond INR-based pairs.
- If an app offers international forex pairs like EUR/USD, GBP/USD, or XAU/USD, avoid doing any trade and delete the app.
2. Unrealistic Profit Claims
- Apps promising guaranteed returns or high profits with no risk are likely scams.
- Legitimate forex trading involves risks, and no one can guarantee profits.
3. Pressure to Refer Others
- Illegal forex trading apps often run MLM (Multi-Level Marketing) schemes.
- They offer bonuses for referring friends but don’t focus on actual forex trading.
6. Use of Unregulated Payment Methods
- If an app only allows crypto payments, UPI to personal accounts, or e-wallet transfers, it’s likely illegal.
- Regulated brokers use bank transfers or recognized payment gateways.
7. Lack of Transparency in Operations
- No clear contact details or fake office addresses.
- No legal terms and conditions or risk disclosure.
- No customer support or only available through social media.
How to Report Illegal Forex Trading Platforms in India?
If you come across an illegal forex trading app in India, you can report it to SEBI, RBI, Cyber Crime, or the Enforcement Directorate (ED). Here’s how:
1. Report to RBI
Since RBI regulates the currency market in India, hence cases of illegal forex trading apps must be reported to RBI. For this:
- Sent an email to RBI with name, details, and proof of illegal activities.
- You can also complain to the online portal by registering and submitting details of scam.
2. Lodge a Complaint in SCORES
The app or platform is associated with trading, hence involvement of SEBI is important too. Hence you can report it to SEBI as well.
- Go to the SEBI SCORES portal.
- Click “Complaint Registration”
- Select “Unregistered Investment Advisory” or “Fraudulent Forex Trading”
- Upload evidence (screenshots, app links, transaction receipts).
3. File a CyberCrime Complaint
Illegal forex apps often engage in fraud, financial scams, and identity theft. Hence to prevent yourself from bigger consequences, report the concern to cyber crime.
- Visit the Cyber Crime Portal.
- Click “Report Financial Fraud”.
- Fill in details about the app, transactions, and scam.
4. Report to the Enforcement Directorate (ED)
ED investigates forex scams under the Prevention of Money Laundering Act (PMLA). So, it becomes essential to report the case to ED as well by following a few simple steps as below:
- Report the concern by sending an email.
- Other than this, you can submit a complaint in person at any ED regional office
Conclusion
Illegal forex trading apps in India operate without RBI or SEBI approval, exposing traders to fraud, financial losses, and legal risks. Many of these platforms promise high returns, easy withdrawals, and “zero risk” trading, but they often engage in scams, fund misappropriation, and Ponzi-like schemes.
Indian regulations only allow forex trading in INR-based currency pairs (USD/INR, EUR/INR, GBP/INR, JPY/INR) on NSE, BSE, and MCX. Trading international forex pairs like EUR/USD or GBP/USD via unauthorized apps is illegal.
Be aware and be alert while downloading any trading apps. Check for authentication & certification to prevent yourself from getting scammed.
In case you have been a victim of a forex trading scam in India then fill in the form below. Our team will call you and assist you in reporting the complaint on the respective platform.
