Those undertaking forex trading transactions using debit/credit cards, beware! The Reserve Bank of India has directed banks to close accounts of customers undertaking such transactions that have been banned. 

In a notification issued on Wednesday, the RBI has asked banks to block the card or account of any customer making such transactions and has also warned banks against inaction.

“If it is observed that a bank has failed to carry out the measures as outlined above, Reserve Bank of India may proceed against the defaulting bank and take any action as may be deemed necessary,” the notification stated.

The regulator has said that customers continue to undertake online trading in foreign exchange on different portals offering such schemes wherein they make payments from their Indian bank accounts to foreign entities and in turn receive cash refunds from them.

Most of these transactions on portals are done on margin basis with huge leverage or on an investment basis, where returns depend on forex trading.

The apex bank has been trying to curb the offshore rupee market after the rupee hit new lows ove the last couple of months. Banks have been instructed to cut down on overnight positions. In addition, the apex bank has slashed the limit for remittances made by residents from $200,000 to $75,000 per year.