RBI warns of fictitious offers of cheap funds from abroad .

The RBI has cautioned the public against fictitious offers for release of cheap funds claimed to have been remitted by overseas entities to banks in India.

The RBI, in a notification, has said that certain foreign entities and individuals, including Indian residents acting as their representatives, make offers through letters or e-mails of huge amounts of money in foreign currency on the pretext of helping the recipients in their business or ventures in India.

Once contact is established, the offer is followed by a request seeking details of bank accounts and asking the recipients some amount to be remitted as initial deposit or commission so that the money on offer could be transferred.

Likewise, the RBI has received references in the recent past from individuals or authorised dealers seeking approvals and clarifications for effecting remittances in foreign currency towards commission or fees for receiving prizes won in overseas lottery schemes.

It has also come to the notice of RBI that certain overseas organisations have been advising individuals, companies and trusts in India that huge sums of money for disbursal as loans at cheap rates has been kept in an account with RBI and that the funds will be released after approval from the apex bank.

To substantiate their claims, the operators even produce copies of certificates or deposit receipts purported to have been issued by the RBI. The bank has clarified that remittance in any form towards participation in lottery schemes is prohibited under Foreign Exchange Management Act, 1999.

These restrictions are also applicable to remittances for participation in lottery-like schemes operating under different names, such as money circulation scheme or remittances for the purpose of securing prize money or awards.

The banking regulator has further clarified that it does not maintain any account in the name of individuals, companies or trusts in India to hold funds for disbursal.

Source : Business Line