The Deepening Roots of Forex Scams in India

Forex scams have taken different shapes in India over time. It‘s a well-known fact that unregistered firms carry out these scams on a large scale through a wide nexus that spreads across even small towns and villages in India. But scams don’t stop here! Even the big banks have been caught in forex scams, raising suspicion over investment safety. This guide takes a deep dive into the scam-hit forex market in India.

The 6,000-crore Bank of Baroda Forex Scam Took Everyone by Surprise

The Indian financial services industry faced one of the major forex scams in 2015. There were illegal transfers worth around INR 6,000 crore into companies located in Dubai and Hong Kong through 59 bank accounts opened fraudulently at Bank of Baroda's Ashok Vihar branch in New Delhi. The accountholders falsely reported that these transactions were made for the import of goods, including cashew nuts, rice and dry fruits. However, upon investigation, it was found that no such goods were imported. All those funds went to shell companies for illicit means. Despite being a leading public sector bank, Bank of Baroda could not prevent this scam.

IndusInd Bank‘s Stocks Plummet 27% Owing to an Accounting Discrepancy in Forex Hedging

On March 11, 2025. IndusInd Bank’s stocks plummeted 27% as a result of an accounting discrepancy in its forex hedging strategy. While depositors didnt face any risk, they were naturally concerned about how the bank went about managing their deposits.

IndusInd Bank offered attractive interest rates on NRI deposits to push foreign currency inflows. The bank accumulated NR deposits worth INR 58,600 crore by Q# FY25, accounting for 14.3% of its overall deposits i,e, INR 4.09 lakh crore. While it seemed like a smart move, the bank adopted complex hedging mechanisms for foreign exchange risk management. This led to an accounting mismatch and a massive loss worth INR 1,500 crore in Q4 FY 2024, around 2.3% of its overall net worth.

Unregistered Brokers Dupe Millions of Investors with Fake Return Promises

There are just too many unregistered brokers in India who have hurt India‘s forex landscape with their malicious acts. These brokers are not registered by the Securities and Exchange Board of India (SEBI) or authorized by the Reserve Bank of India (RBI) to carry out forex transactions. The infamous case of BotBro, an AI-based forex trading company, jolted many investors with the lure of guaranteed 5-15% monthly returns. They were shown lavish dreams of SUVs, foreign trips, and many other fake promises. However, after a point, investors could not withdraw money, resulting in massive complaints against the trading firm’s founder Nawab Ali Alias Lavish Chaudhary. The ED seized assets worth INR 170 crore while raiding its multiple offices in India.

Forex Scams Also Happen Through Informal Routes

Forex scams have expanded beyond the conventional means such as banks and unregistered brokers to even an informal gang across the 3-tier cities, towns and villages across India. There have been countless cases regarding the same. Be it the Kerala man Sreejith Rajendran duping retired army colonel for 18.8 lakh, a racket siphoning out INR 21 crore from 5,000 investors in Srinagar or the Chunnabhatti call centre case, forex scams are like a daily affair in India.

Conclusion

Forex scams are not new to India. On the ground, lots of forex scams are happening, calling for rapid legal measures to stop the menace. It's a good investment avenue despite the risks. However, with scams, the investment sentiment suffers, resulting in not-so-great participation from the public. To know whether a forex deal is good for you, check out the WikiFX website - where we inform you everything about the brokers.