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Blood trail of the false rupee

Steadily increasing amounts of counterfeit rupees being brought into India are becoming a major headache for New Delhi. Shishir Gupta reports.

delhi Updated: Mar 12, 2013 08:42 IST
Shishir Gupta
Shishir Gupta
Hindustan Times

Steadily increasing amounts of counterfeit rupees being brought into India are becoming a major headache for New Delhi. The concerns are less about the economic impact than the evidence that much of this fake money is used to support terrorist and militant activity inside India.

Senior Indian intelligence officials say that Pakistan-based operatives exported to India fake currency amounting to a record Rs 25 billion into India in 2012 alone to fund terror and illegal activities. The quantity of fake Indian currency being pumped into the country from Pakistan via the Bangladesh and Nepal routes has been steadily climbing over the past few years.

Authorities estimate Rs 16 billion worth of fake currency was brought into India in 2010, a figure that rose to Rs 20 billion in 2011. Though some of this was intercepted, it is only a small fraction of the total. In 2010 and 2011 respectively, Rs 300 million and Rs 450 million worth of counterfeit rupees were recovered.

But this constitutes only 2% of what was pushed into India that year. It is believed that the Pakistani military's Inter-Service Intelligence is behind about 10% of the counterfeit currency pushed into India and uses it to finance subversive activities against India.

A large number of non-governmental organisations in Pakistan, Nepal and Bangladesh are being investigated by Indian authorities. And there is growing evidence linking the fake currency racket in South Asia with Pakistan-based terror groups and crime lords.

During his interrogation, convicted American-Pakistani national and Lashkar-e-Taiba (LeT) terrorist David Headley said that his handler, "Major Iqbal" of the ISI, had given him an unspecified amount of fake Indian currency to conduct reconnaissance activities in Pune in the second half of 2007.

Another instance: Turkish nationals Huseyin Koroglu and Mehmat Yaman were arrested in Delhi on June 3, 2011, with R15.4 million of counterfeit money. Investigations revealed that the consignment had been arranged by Lahore-based Hafiz Iqbal Kana, an operative for the Dawood Ibrahim gang.

In May 2010, arrested Pakistani agent Irfanullah aka Roshan Singh had entered India with the help of a counterfeit money dealer Pramod Kushwaha via a Nepal smuggling route. After both were arrested in 2010 and 2011, it was revealed Irfanullah was acting at the behest of Pakistani operative "Major Tipu" aka Azad and had been tasked to get in touch with one Bagga, a Germany-based contact linked to the Khalistan Zindabad Force.

Apart from these three instances, there have been a series of arrests since 2008 indicating that the counterfiet Indian currency racket - run with the support and assistance of Pakistan's ISI - is used to fund terror activities of groups like the LeT, Jaish-e-Mohammed, Hizbul Mujahideen, Al Badr, Harkat-ul-Jehadi Islami (HuJI) and Jamaat-ul-Mujahideen, Bangladesh (JMB).

Beyond India
The funding of terror in South Asia is not confined to the use of fake Indian currency. US intelligence reports shared with India indicate that Saudi Arabia is the largest source of such funds - supplied via the informal hawala route - for Islamicist groups in India's neighbourhood. Qatar, Kuwait and the United Arab Emirates are the next largest sources of such funding.

While Saudi Arabia is the most significant source of funding to global Sunni terrorist groups, the Afghan Taliban and their allies the Haqqani Network get cash injections from the UAE, which is home to 1 million Pakistanis and 1.5 million Afghans.

"Saudi NGOs involved in financing entities for the propagation of Islam that have come under the adverse notice of the US Senate for suspected diversion of funds to terrorist organisations include the World Muslim League, International Islamic Relief Organisation and World Assembly of Muslim Youth," said a senior official.

Official sources said that while terror activities in India are being sustained on hawala money and fake currency, there is evidence of Islamicist NGOs in Bangladesh and Nepal becoming benefactors of dubious funding sources.

JMB chief Abdur Rehman had disclosed to Bangladeshi authorities during interrogation that his organisation was receiving funds from Pakistan and Kuwait-based NGOs. Dhaka is currently investigating the role of NGOs based in Kuwait, Saudi Arabia and Qatar in funding the JMB's radical Islamicist activities.

"A Riyadh-based charity organisation has now spread its network to 38 districts. In 2002, seven of its men were arrested for suspected links to terror funding. A West Asia-funded and Dhaka-based NGO has 150 madrassas at its disposal to propagate radical tenets. Another NGO is funded by a Saudi charitable trust for propagating the idea of Muslim Ummah," the official said.

A Kuwait-based society attracted adverse publicity for its suspected role in funding the April 17, 2005, bombings in Bangladesh and at least 10 NGOs were identified as sources of funds for extremists.

The situation in Nepal is no different, with a local Islamicist NGO receiving funds from a Pakistan-based trust that has known to have had links with LeT, JeM and Taliban in the past. Another Islamicist NGO is expanding into the terai region of Nepal and is seeking funds from sources in the UK, Australia, South Africa, Nigeria and Riyadh.

First Published: Mar 12, 2013 01:27 IST