An email helpline has been established by the Reserve Bank of India or RBI to help foreign exchange start-ups with regards to regulations. FOREX traders are now aggressive in cross-border operations.
The RBI released a circular on Tuesday stating the reason for such helpline,”Start-up enterprises usually undertake a wide range of cross-border transactions including those related to investment. Cross-border transactions of resident Indians are subject to the regulatory regime provided by the Foreign Exchange Management Act, 1999”.
Another factor for is that some Indian FOREX start-ups have shifted operations to Singapore where rules are lighter when it comes to taxation and funds. The practice has resulted in growth for cross-border deals which is subject to FEMA regulations since this involves foreign currency.
The rule on the filing of an online export form for each transaction imposed last July is also a deterrent. Traders found the process tedious.
The RBI encouraged start-ups to provide detailed information and let the bank know what issues they are facing so this can be resolved. The helpline can provide guidance and answers to questions effectively.