RBI to seek information from overseas regulators to investigate Rs 6000 crore forex scam

The Reserve Bank of India (RBI) will work together with overseas regulators to investigate Rs 6000 crore forex scam that was unearthed early this month.

Speaking to media at the sidelines of a FICCI event, deputy governor S S Mundra said," RBI will invoke the provisions of exchange of information from overseas regulatory authority." Further he said that the RBI is also making all attempt to plug the loopholes that led to the forex scam that is being investigated by Enforcement Directorate and Central Bureau of Investigation.

He advised individual investors to invest their savings rather than borrowing to invest in equities. "Individuals should invest through savings and not leveraging route." He further said that individuals should invest through the institutional route since they are well informed and would be better qualified to gauge the risk.

He said that although banking sector has not fully utilised its investable limit in equities market, he added that 'As a regulator we would not encourage high level of leverage in capital markets for the banking sector," As of now banks are allowed to invest upto 40% of their net worth in equities market. So far, the total investment made by banking sector is just about 11.23% and that of finance companies is about 23.6% (of the 40% cap).

(Image credits: Indiatimes)