The Air Intelligence Unit (AIU) of the Mumbai customs is keeping a close eye on flyers bringing in foreign currency after receiving intelligence that some people are converting the demonetised notes into foreign currency to save the money.
“There are reports that people are converting their old currency to foreign currency and then taking it out of the country, only to carry it back again. They declare this foreign currency before the customs and make it legal,”said a senior officer.
The rules say that any person can bring foreign currency to India and there is no limit on it. However, declaring the currency on a Currency Declaration Form (CDF) in two scenarios is mandatory. First, where the value of the notes exceed US$5,000 or equivalent and second, where the aggregate of the foreign exchange (in the form of currency notes, bank notes, traveller cheques etc.) exceeds US$ 10,000 or equivalent.
Officials said that the after-effects of demonetisation included new trends in money-laundering and smuggling. The AIU has been initiating cases wherein flyers have been intercepted with undeclared foreign currency being brought to the country. AIU is investigating to find out if the attempts had anything to do with the demonetisation.
The agency, however, has limitations because detecting currency is not an easy task. Sources stated that the baggage scanning machines are equipped with metal detectors and they need to be upgraded to detect currency as well. There is also a huge demand for the new denominations abroad.
“New Indian notes of Rs 500 and Rs 2000 are also in demand by Forex dealers who are abroad. Some are resorting to smuggle them abroad,” said the officer.
Since the announcement on scrapping old notes on November 8, foreign exchange centers outside India have stopped accepting the notes. This has limited the options for people abroad to covert their black money into white.