RBI cautions Public against Fictitious Offers of Remitting Cheap Funds from Abroad

The Reserve Bank of India has advised members of public not to fall prey to
fictitious offers for release of cheap funds claimed to have been remitted by overseas
entities to banks in India / Reserve Bank of India. Members of public should also not
make any remittance towards participation in such schemes/offers from unknown
entities.
Describing the typical modality of such offers, the Reserve Bank of India
stated that certain foreign entities / individuals, including Indian residents acting as
representatives of such entities / individuals, make offers through letters / emails,
etc., of huge money in foreign currency to resident individuals / entities (including
schools / hospitals), on the pretext of helping them in their business / ventures in
India. Once the contact is established, the offer is followed by a request seeking
details of bank account of the Individuals / Indian entity and asking some amount to
be remitted to them as initial deposit / commission so that the offer money could be
transferred. Likewise, references have been also received in the Reserve Bank in
the recent past from individuals / authorised dealers seeking approvals / clarifications
for effecting remittances in foreign currency towards commission / fees for receiving
prizes won in overseas lottery schemes etc. It has also come to the notice of the
Reserve Bank that certain overseas organisations have been advising individuals /
companies / trusts in India that huge sums of money for disbursal of loans in India at
cheap rates has been kept in an account with the Reserve Bank and the funds would
be released after approval from the Reserve Bank. To substantiate their claims, even
copies of certificate / deposit receipts purported to have been issued by the Reserve
Bank are produced by such operators.
The Reserve Bank of India has today clarified that remittance in any form
towards participation in lottery schemes is prohibited under Foreign Exchange
Management Act, 1999. Further, these restrictions are also applicable to remittances
for participation in lottery-like schemes functioning under different names, such as,
money circulation scheme or remittances for the purpose of securing prize money /
awards, etc. The Reserve Bank of India has further clarified that it does not maintain
any account in the name of individuals / companies / trusts in India to hold funds for
disbursal.
G. Raghuraj
Deputy General Manager
Press Release : 2007-2008/770