Fake currency in India: Rs 169,000 crore

The Daily Pioneer newspaper in a recent investigation "Fake notes, real problem" has found out that according to a recent Government estimate, counterfeit currency amounting to Rs 169,000 crore is floating around in the Indian financial system.

According to a recent Government estimate, counterfeit currency amounting to Rs 169,000 crore is floating around in the Indian financial system. From real estate transactions to ordinary grocery shopping, these bogus notes are being deployed everyday — sometimes innocently, sometimes with a sinister objective. “In 2008, the CBI registered 13 cases having international/ inter-State ramifications relating to the recovery/ seizure of fake Indian currency notes,” says Central Bureau of Investigation (CBI) spokesperson Harsh Bhal.

And there is a terror angle to it too.

In India, counterfeit currency has long been seen as a source of funding for terrorism. Investigations into at least four cases — the Hyderabad bombings of August 2007; the attack on the Indian Institute of Science, Bangalore, in December 2005; the Ahmedabad bombings of July 2008; and the 26/11 terror attack on Mumbai — revealed a link.

Such currency is also circulated due to sheer negligence of the banking system and lawlessness or lack of implementation of law on the part of the Government.

Dangerously, the counterfeiters have managed to find their way into the official banking system. “Perhaps there is no better way to pummel India’s economy,” says an intelligence official. He explains the modus operandi. Fake currency operatives usually deposit the notes during peak hours when bank tellers are pressed for time and liable to make mistakes.

A few months ago, fake currency amounting to nearly Rs 3 crore was found in the chest of the State Bank of India’s Domariaganj branch in Uttar Pradesh’s Siddarthnagar district. Some fake notes were also found in the currency chest of ICICI Bank’s Sanjay Place branch in Agra. The examples can go on.

The sheer amount of cases registered in first six months of 2008 on fake currency can ring bells for any responsible Government. Not in Bharat, mind you.

According to the National Crime Record Bureau (NCRB), between January and August 2008, 1,170 cases had been registered across the country in connection with fake currency. Bogus notes with a face value of Rs 3.63 crore had been seized. NCRB data shows 2,204 such cases were reported in 2007.

In any other nation, there will be strict action taken by going after the source to see to it that it doesn't happen again. But in Bharat, a debate is done whether or not to throw illegal Bangladeshi out or what to do about Pakistan, should Bharat continue to make music with Pakistani musicians, etc. Why? Because they are Muslim nations.

Intelligence agencies see the counterfeit rupee attack as a form of “economic terrorism”. They have traced many of the fake currency operations back to Pakistan’s Inter-Services Intelligence (ISI) and its ancillary crime syndicates such as the Dawood Ibrahim gang. With a multi-layered network in Pakistan, Nepal, Bangladesh, the United Arab Emirates, Sri Lanka and also inside India, counterfeit notes enter India in all three ways — through land, sea and air.

Intelligence officials say the ISI uses terrorist groups such as the Lashkar-e-Tayyeba (LeT), the Jaish-e-Mohammad (JeM) and the Harkat-ul-Jihad-al-Islami (HuJI) to smuggle and circulate counterfeit currency in India.

A large chunk of fake currency comes in through India’s borders with Pakistan and Bangladesh. The frontier with Pakistan in Jammu & Kashmir, Punjab, Rajasthan and the porous border with Bangladesh in West Bengal, Assam and the Northeast make for entry points. The Uttar Pradesh-Bihar border with Nepal is another route for the inflow of fake currency.

Sea-borne consignments also turn up in Tamil Nadu (from Sri Lanka) and in Gujarat (from Pakistan). Additionally, bogus notes are flown in from Dubai.

Local criminal networks are activated for the purpose. In Rajasthan, for instance, fake currency operations are closely linked to satta (gambling) and opium smuggling. Indirectly, this drug smuggling ends up financing terrorism in Pakistan.

In Dubai, two key Dawood lieutenants — Aftab Bhakti and Babu Gaithan — run operations. The money is transported to India in regular flights, through ordinary passengers. Indian labourers who work in Dubai are the usual targets. The racketeers focus on those who are in need of money to purchase return tickets. They arrange tickets and ask for a favour: “Deliver our cargo to India.”

The passengers are handed ordinary suitcases, with perhaps perfume bottles and clothes packed inside. A false bottom conceals the fake currency, wrapped in carbon paper or hidden in photo albums. From Dubai, the fake currency consignments reach two major transit points — Mumbai and Hyderabad.

Bharatiya Government doesn't have guts to go after naxal camps in Assam, Arunachal Pradesh, Andhra Pradesh, Chattisgarh, let alone going after terrorist camps in Pakistan or Bangladesh. So forget about them going after the printing press locations in these countries.

Where are the fake notes printed? A CBI report to the Finance Ministry suggested that the Pakistan Government printing press in Quetta (Baluchistan) was churning out large quantities of counterfeit Indian currency.

Karachi’s security press, and two other presses in Lahore and Peshawar, have also been suspected.

Reports say the paper for the fake notes is sourced from London. Indian investigators also allege the Pakistani Government imports currency-standard printing paper far in excess of official needs. The extra quantum is handed over to the ISI, it is believed.

The fine quality of Pakistan-produced fake currency has alarmed India. Printed on security paper, the sophistication and craftsmanship is of a high order. “Only a specialist can make out the notes as counterfeit,” says an intelligence official. The fake notes duplicate serial numbers and floral designs of genuine notes. In addition, they even have the security wire or “guide wire” — the common man’s mode of authenticating a currency note.

Please go to the article "Fake notes, real problem" to learn how to spot a counterfeit.