RBI/2009-10/474
A.P. (DIR Series) Circular No.54
May 26, 2010
To
All Authorised Dealer Category – I Banks
Madam / Sir,
Remittance towards participation in lottery, money circulation schemes,
other fictitious offers of cheap funds, etc.
Attention of Authorized Dealer Category - I (AD Category - I) banks is invited
to the
A.P. (DIR Series) Circular No. 22 dated December 7, 2000,
A.P. (DIR
Series) Circular No. 02 dated July 27, 2001 and
A.P. (DIR Series) Circular No.
49 dated June 4, 2002 in terms of which it was advised that remittance in any
form towards participation in lottery schemes are prohibited under the Foreign
Exchange Management Act, 1999. Further, these restrictions are also applicable
to remittances for participation in lottery like schemes existing under
different names like money circulation scheme or remittances for the purpose of
securing prize money/awards, etc.
- It is observed that there has been a spate of fictitious offers of cheap
funds in recent times from the fraudsters through letters, e-mails, mobile
phones, SMS, etc. Communications on fake letterheads of the Reserve Bank and
purportedly signed by its top executives / senior officials are also being sent
to targetted people. Many residents have been victims of such teasing offers and
lost huge money in the process. The Reserve Bank has already alerted the public
on several occasions about such fictitious schemes/ offers, through the print
and the electronic media and more such public education campaigns are being
planned.
- It has been brought to the notice of the Reserve Bank that fraudsters are
seeking money from the gullible people, under different heads, such as,
processing fees/ transaction fees/tax clearance charges/conversion charges,
clearing fees, etc. The victims of the fraud have also been persuaded to deposit
the amount in accounts with banks in India, and such amounts have been withdrawn
immediately. It is also observed that multiple accounts are being opened in the
name of individuals or proprietary concerns, at different bank branches for
collecting the transaction charges, etc. AD Category - I banks are, therefore,
advised to exercise due caution and to be extra vigilant while opening or
allowing transactions in such accounts. It is clarified that any person resident
in India collecting and effecting / remitting such payments directly /indirectly
outside India would make himself/ herself liable to be proceeded against with,
for contravention of the Foreign Exchange Management Act, 1999 besides being
liable for violation of regulations relating to Know Your Customer (KYC) norms /
Anti Money Laundering (AML) standards.
- AD Category-I banks may also bring the contents of this circular to the
notice of their constituents and customers concerned. Authorised Dealers may
also give wide publicity to the instructions contained in the A.P. (DIR Series)
Circulars referred to above and the Press Releases issued by the Reserve Bank of
India dated December 07, 2007 and July 30, 2009 on Fictitious Offers/Lottery
Winnings/Cheap Fund Offers (copies enclosed).
5. The directions contained in this circular have been issued under sections
10(4) and 11 (1) of the Foreign Exchange Management Act, 1999 (42 of 1999).
Yours faithfully,
(Salim Gangadharan)
Chief General Manager-in-Charge