A Central Bureau of Investigation (CBI) report to the Finance Ministry has reiterated the claim that Pakistan government Printing Presses in Quetta, Karachi, Lahore and Peshawar, were churning out large quantities of FICN. Reports indicate that the paper for the fake notes is sourced from London. Indian investigators also believe that the Pakistani government imports currency-standard printing paper far in excess of official needs. The extra quantum is handed over to the ISI for FICN production.
In November 2010, reports suggested that India had decided to raise the charge of printing and circulating FICNs against Pakistan at various international fora. According to government sources, armed with concrete evidence against Pakistan, India would first approach the Financial Action Task Force (An inter-governmental body whose purpose is the development and promotion of national and international policies to combat money laundering and terror financing). The matter would subsequently be raised with the World Bank, IMF and Interpol as well.
India’s FICN problem received international attention when the International Narcotics Control Strategy Report, 2011, of the US State Department confirmed that India faced an increasing inflow of counterfeit currency, produced primarily in Pakistan, and that terrorist and criminal networks used this money to finance their activities in the country. “India faces an increasing inflow of high-quality counterfeit currency, which is produced primarily in Pakistan but smuggled to India through multiple international routes," the Report noted. Further, criminal networks exchange counterfeit currency for genuine notes, which not only facilitates money laundering, but also represents a threat to the Indian economy.
The ISI pushes large chunks of FICN into India directly from Pakistan, as well as through Nepal, Bangladesh, Sri Lanka, Malaysia and Thailand. Pakistan International Airlines (PIA) has been used to transport counterfeit currency to conduits in Nepal, Bangladesh and Sri Lanka. The modus operandi was revealed by two Nepali counterfeit currency traffickers who were arrested by the Thailand Police in October 2007. During interrogation, the accused disclosed that they were working for a prominent Nepali businessman. Nepal has long been used for this ‘trade’, so much so that the possession of any high denomination Indian currency note (R 500 and R 1000) is prohibited in the country. Significantly, in one of the earliest cases confirming official complicity, a Pakistani diplomat, Asim Saboor, Assistant Secretary at the Pakistani Mission in Kathmandu, was caught by the Nepali Police in the act of conducting a transaction with FICNs, and was found distributing counterfeit Indian banknotes on January 3, 2000. He was summarily expelled from Nepal.
The Uttar Pradesh (UP)-Bihar border with Nepal is the most prominent route for the inflow of fake currency from Nepal into India. After the neutralization of an FICN racket in UP in 2010, interrogations revealed that the gang employed a set of six women couriers from Champaran in Bihar and another set of four hailing from Nepal. The FICN travelled to Uttar Pradesh from Nepal along two routes: from Nepal to UP via Bihar, and directly to UP, particularly through the Siddhartnagar and Maharajganj routes. The gang used private vehicles to cross the Nepal border, while the rest of the movement was done principally on public transport. To minimise suspicion, women couriers, particularly those with young children, were preferred within India, and were paid two per cent of the total face value of the FICN. A male shadow was used to trail the couriers to ensure that they were not trapped by the Police. FICN of R 1,000 denomination was bought in Nepal at the rate of R 500 to R 600, while the R 500 denomination note was bought for R 300 to R 400 each.
The Rajasthan and Punjab borders are the other corridors through which Pakistani agents push fake currency into India. Following a Police raid on an ISI cell in Delhi in 2011, the arrested operatives revealed that the Thar Express, running between Munnabao in Pakistan and Jodhpur in Rajasthan, was being used to smuggle FICN into India. Fake currency to the extent of INR 3.3 million was seized from them. They also confirmed that the Indian currency was printed in Pakistan and illegally pushed into India through Nepal, Bangladesh, Sri Lanka, Malaysia and Thailand.
FICNs are also flown in from Dubai, with the crime syndicate, D-Company, headed by Dawood Ibrahim, playing a prominent role. The D-Company has been identified as a criminal-terrorist syndicate by the US Congress, and is on the Interpol’s wanted list for organized crime, counterfeiting, and terrorist activities. D-Company operations in Dubai are run by two key lieutenants — Aftab Bhakti and Babu Gaithan. The money is transported to India through regular flights, with ordinary passengers. Indian workers from Dubai are specifically targeted, and are paid the value of a return ticket that enables them to travel home, in exchange for carrying a consignment. From Dubai, the fake currency consignments reach two major transit points — Mumbai and Hyderabad. The fake currency is offered to crime networks throughout India at a 1:2 ratio of original currency to counterfeit currency.
Sea-borne consignments are also delivered to Tamil Nadu (from Sri Lanka) and Gujarat (from Pakistan).
Local criminal networks are also used for distribution. In Rajasthan, for instance, fake currency operations are closely linked to satta (gambling) and opium smuggling. In one case, Asghar Ali, arrested at Ahmadabad in Gujarat in 2009, confessed to operating as a contact point for those who sought to get into the FICN business, and facilitated their contacts with agents who would arrange for the delivery of FICNs against hawala payments, from Dubai and Pakistan. He confessed to linkages with Pakistani intelligence agencies as well.
To tackle the challenge of this new security threat in a coordinated manner, India’s Ministry of Home Affairs, in March 2011, asked States to step up their drives against FICNs. States were asked to share a copy of the forensic report on the seized and recovered FICNs with the Intelligence Bureau (IB) and the RBI. The States were also asked to set up a committee headed by the Directors General of Police, with General Managers/Deputy General Managers of the RBI, officers of the intelligence branch of the State Police, and the Criminal Investigating Department of the State Police, as members. A home ministry official, on condition of anonymity, disclosed, “States have been asked to designate a Police Station at each District Police Headquarters as the nodal Police Station wherein the offences relating to FICNs recovered by banks can be reported. The banks will also correspondingly designate a nodal officer in each of the districts in their respective banks. These officers will be vested with the responsibility of reporting the seizures of the FICNs.”
States have been asked to evolve an efficient system of registration of cases, crucial to enable both proper investigation and a comprehensive database for a meaningful action to get to the sources of the proliferation of FICNs. The National Investigation Agency (NIA) has also been empowered to probe and prosecute cases relating to FICN related offences under various provisions of the Indian Penal Code. The Centre has nominated the CBI as the Nodal Agency to monitor investigation of fake currency note cases. The RBI has also strengthened the mechanism for detection of counterfeit notes by the banks.
Despite these various measures and a progressive recognition of the problem by international agencies and foreign powers, FICN inflows into India remain uninterrupted. With Pakistan’s unrelenting commitment to the anti-India ‘jihad’, India is yet to find an effective foil to neutralize this tool of economic terrorism, even as it struggles to cope with Pakistan’s terrorist proxies operating on its soil.