Surgical strike on black money

By K.N. Pandita

Samajwadi Party supremo Mulayam Singh Yadav calls PM’s ‘operation black money’ as election stunt. Kejriwal calls it “big scam”. Rahul Gandhi stands in queue to change his Rs. 500 note, and the mercenary media gives it TV hype. During Vajpayee regime, American Enforcement functionaries had detained Rahul at JF Kennedy airport with one lakh US Dollar notes in his baggage. Vajpayee intervened. Modi’s adversaries had begun lampooning his election slogan of eradicating corruption from administration.

Prime minister’s decision to demonetise Rs 500 and Rs 1000 notes, has dealt a body blow to Pakistan’s multi crore fake Indian currency network (FICN) besides indigenous sultans of black money.

Pakistan was printing fake Indian currency at its government press in Punjab and Baluchistan province. The Directorate of Revenue Intelligence, Research and Analysis Wing and other intelligence agencies had reported Pakistan government acquiring ink and paper far in excess of requirement to print Pakistani currency. Previous governments dithered. But “PM Modi has taken the bull by the horns and by demonetizing big currency notes all anti-India forces lose,” says Vikram Singh, former Director General of Uttar Pradesh Police.

Pakistan intelligence drew a meticulous plan of destabilizing India’s economy by pumping fake Indian currency notes of 500 and 1000 denominations. Our Intelligence agencies have documented Pakistan acquiring the printing press illegally and then purchasing ink in excess from Frankfurt in Germany and from Switzerland. “In fact Pakistan is printing more (fake) Indian currency than its own currency”, asserted one reporter.

Investigations have revealed that Habib Bank of Pakistan used branches of a local bank in Nepal along the India-Nepal border to push illegally printed currency into India. A local Indian bank also came under investigation; repeated investigations into its operations were detailed. It indicated that corruption had seeped deep.

After forensic tests of fake Indian currency notes (FICN), NIA submitted a report to the Home Ministry saying that Security Printing and Minting Corporation of India Ltd. had concluded that FICN were manufactured at regular currency making machines owned by a sovereign government. It added that some of the pivotal parameters of the FICN and Pakistan currency notes bear similar value. The forensic evidence coupled with field investigation established the role of Pakistan in the manufacture of FICN.

Pakistan used a complex web of couriers, banks and even diplomatic courier to flood the Indian market with fake currency. However, realising that strong Indian economy would not be derailed, it focused on using fake currency to fund terror in Jammu and Kashmir in addition to Indian Mujahedeen modules in several parts of the country including Maharashtra and Gujarat, Karnataka, Kerala, Andhra Pradesh, Bengal and Bihar. Money was routed through Nepal, Bangladesh, Dubai, Thailand and recently even parts of China.

Estimates vary as to how many fake notes are in circulation. According to a study completed by the NIA in 2015, it computes to 400 crore rupees. However, in 2011, a report by the Intelligence Board indicated that 2,500 crore rupees in fake currency are coming into the Indian market each year.

It is estimated that four out of every 1,000 notes in circulation in India are fake. Fake notes were even found in cash withdrawn from ATM machines at banks in India, particularly fake 500 and 1,000 rupee notes. News reports state that detection has increased by 53% in 2014-15. In addition, in 2015, the Reserve Bank of India changed the design of the number panels on the 100, 500 and 1,000 rupee notes to make them harder to copy. However, major seizures of fake currency still continue.

Official belief is that the notes are produced by foreign racketeers in Pakistan, on demand from Pakistan’s military intelligence agency and the ISI. India’s NIA found that Pakistani terrorists had used fake Indian currency in the 2008 attack in Mumbai.

Apparently, Pakistan has been able to set up a fake Indian currency production unit in Dubai. Fake notes are being smuggled into India via Nepal, Bangladesh, Afghanistan and Sri Lanka. Malaysia, Thailand, China, Singapore, Oman and even Holland are also emerging as new transit centres.

The latest data released by the National Crime Records Bureau (NCRB) indicates that Gujarat is considered to be the safest state for circulating counterfeit currency. This is closely followed by Chhattisgarh. Other states where large amounts of fake notes have been recovered are Andhra Pradesh, Punjab and Haryana.

Hawala feeds terror.

Terrorist groups use hawala to move and distribute funds to their cadres and sympathisers across the globe. In the July 2006 Mumbai train bombings, Pakistan-based handlers had used the hawala route to transfer money to IM cadres. Similarly, according to FBI press release of 15 September 2010, in the Times Square car bombing attempt in New York, the perpetrator, Faisal Shahzad, had received money through hawala to plot the attack.

Pledging to choke funding channels of terrorists, Prime Minister Modi was in consultation with experts discussing options of sealing the sources of hawala money. Nevertheless, hawala remains a tough task as it is very difficult to gather precise information about transactions. The ease of transferring funds and the anonymity of the transactions carried out by the service providers—known in the Indian subcontinent as hawaldars—eventually took hawala beyond trade and made it the preferred system for criminals looking to move funds across countries without alerting the authorities.

Despite formal system of banks and remittance services, hawala continues to thrive. Terrorist groups and organised crime syndicates have used it to launder the money from the sale of narcotics and other criminal activities, across jurisdictions. Al-Qaeda and drug traffickers, for example, regularly use the hawala network in Pakistan and Afghanistan.

However, India had been grappling with the use of hawala for terrorist financing well before September 2001. The 1993 Mumbai serial blasts, carried out by the Dawood Ibrahim crime syndicate, were financed through hawala. Since then, the hawala angle has cropped up in multiple investigations related to terrorist financing, including in the 2006 Mumbai train blasts.

At present, NIA is investigating 11 cases of hawala-routed terrorism funding in India. The most prominent among these is related to the Jammu & Kashmir Affectees Relief Trust (JKART), a front organisation set up in Rawalpindi, Pakistan, by the anti-India terrorist group, Hizbul Mujahedeen (HM). The NIA believes that the HM, under cover of the JKART, transferred Rs. 80 crore through hawala over a span of many years to fund terrorist activities in Jammu and Kashmir. (National Investigation Agency, Ministry of Home Affairs, Government of India, ‘Final Report (U/S 173 Cr PC), State (NIA) V/s Sayyid Salahu’d-Din and Others’, 30 November 2013)

Cases such as these are just the tip of the iceberg within Kashmir Valley—security agencies allege that Kashmiri separatists receive regular hawala payments from Pakistan for anti-India activities. In one prominent case, the police twice arrested Ghulam Muhammad Bhat, an aide of Sayyid Ali Shah Geelani in 2008 and 2011, for allegedly receiving money from Pakistan via hawala for separatist activities. (ITGD Bureau, ‘Geelani aide arrested in Hawala case, Rs 21 lakh seized’, India Today, 23 January 2011).

Recent media reports indicate a surge in hawala funding from charity organisations in the Persian Gulf to seminaries in Kashmir Valley; these funds are used to indoctrinate local youth, and more recently for making the youth throw stones on police.

The deep links between hawala and ‘black money’— many politicians and businessmen allegedly use hawala to launder money and evade tax—add another layer of complexity to the investigations.

A 2009 study by the U.S. State Department noted that funds transferred through hawala were equal to 30-40% of the formal remittances market in India. Recent World Bank data notes that during 2006-2015, the Indian diaspora formally remitted approximately $558 billion to India.

With this vast and alarming scenario depicting enemies of India leaving no stone unturned to bring about the collapse of her economy, Don Quixotes of Indian politics demonstrate their unlimited capacity of making a laughing stock of themselves.

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