Do Not fall Prey to Fictitious Offers of Funds Transfer: RBI Advisory

The Reserve Bank advised banks on May 26, 2010, to exercise due caution
and to be extra vigilant concerning the fictitious offers whereby bank
accounts are opened and/or transactions made in the accounts for
receiving payments styled as transaction charges, etc, towards the so-
called transfer of prize money/award money, etc. The Reserve Bank has
clarified that any person resident in India collecting and
effecting/remitting such payments directly /indirectly outside India is
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.

The Reserve Bank has also re-iterated that the Foreign Exchange
Management Act, 1999 prohibits remittance in any form towards
participation in lottery schemes. These restrictions are also
applicable to remittances for participation in lottery like schemes
existing under different names, such as, money circulation scheme or
remittances for the purpose of securing prize money/awards, etc.

In its circular issued to banks, the Reserve Bank has stated that there
has been a spate of fictitious offers of cheap funds in recent times
from fraudsters. These came through letters, e-mails, mobile phones,
SMS, etc. Detailing the modalities of the fraudsters, the Reserve Bank
stated that communication was being sent on fake letterheads of the
Reserve Bank and purportedly signed by its top executives/senior
officials to targetted people. Many residents have been victims of such
teasing offers and have lost huge sums of money in the process. It was
further brought to the Reserve Bank’s notice that fraudsters sought
money from gullible people, under different heads, such as, processing
fees/ transaction fees/ tax clearance charges/ conversion charges,
clearing fees, etc. The fraudsters open multiple accounts in banks in
the name of individuals or proprietary concerns in different bank
branches for collecting transaction charges, etc. The fraudsters
persuade the victims to deposit certain amount in these accounts. The
amounts are withdrawn immediately leaving the victims in a quandary.

The Reserve Bank has alerted the public on several occasions in the
past about such fictitious schemes/offers through the print and the
electronic media. More such public education campaigns are also being
planned. The Reserve Bank has asked banks to bring the contents of the
circular to the notice of their constituents and customers concerned
and to give it wide publicity.