by VM Sathish on Thursday,January 3,2008
Exchange houses in the Gulf catering to non-resident Indians (NRIs) have begun to take a second look at their clients’ accounts after India’s central bank imposed strict regulations on Indian banks receiving funds from exchange companies.
The move by the Reserve Bank of India (RBI) is an attempt to control the increasing influx of capital into the stock markets and lotteries from NRIs. The huge inflows of foreign wealth have been increasing speculation in the Indian market, which the government fears is artificial and unhealthy, said analysts.
The number of companies offering remittance services to India has been growing in the Gulf and the introduction of net-based cash transaction services has lead to a boom in outlets competing to receive remittances.
Salim Gangadharan, chief general manager of the RBI Foreign Exchange Department, asked exchange companies in the Gulf to make sure their accounts are not used for commercial purposes or to remit money for trading purposes. [Read more]
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