Smuggling of fake currency into India by Pakistan's notorious Inter Services Intelligence directly, or though international criminals, is not a new development, but the manner in which the banking channel is now being used to circulate it is both alarming and astounding. Stray incidents of fake currency carriers sneaking in from Pakistan, Nepal or Bangladesh have come to light from time to time, but government agencies never visualized involvement of organized gangs on a massive scale. This confirms forebodings of "economic terror" being used as a new weapon to destabilize the Indian economy.

Fake currency is often used by foreign intelligence and other agencies and gangsters to pay for their covert operations within India. This includes smuggling of contraband and weapons and ammunitions for use of terrorists operating in various parts of India. Carriers have been pressed into the job and most often they do not know the real criminals behind the operations but are in touch with handlers, whose real identity also is not know to them. Cases of fake currency being printed in India on a small scale as easy-money enterprises have also been unearthed from time to time, but the amounts involved are relatively small and imperfect printing often gives the fake note away.

But, the modus operandi of the international smugglers and other types of criminals has now acquired a new sophistication. They have signed up employees of the huge Indian banking system and made them accomplices in circulating fake notes through established and organized channels, including ATMs, where the customer has no way to return the fakes (if he is able to detect them at first sight) to the bank and get genuine notes in exchange and also report the matter. Reports of small amounts of fake currency tumbling out of the ATMs have also come to light from time to time to time, but the police, as well as, the banks involved have made light of the incidents to protect the reputation of the bank. The Indian banking system being so huge, with lakhs of branches spread across the country and transactions running in thousands of crores of rupees daily, circulation of fake currency worth a few lakhs or crores may to undetected.

This is what must have been happening at the Dumariaganj branch of the country's largest bank, the State Bank of India in Siddharthnagar district of Uttar Pradesh, where the latest discovery of Rs. 1.5 crore in fake currency in Rs. 1,000 and Rs. 500 denominations was made. It was actually a chance discovery that led to the unearthing of the currency scandal, whose ramifications are still unknown. The Uttar Pradesh Government did the right things in handing over to probe to the Central Bureau of Investigation, perhaps, because its own investigating agencies and the police would not be trusted to unearth the whole conspiracy behind the fake currency circulation. But the CBI has not covered itself with glory, considering the manner in which it has handled some recent cases, including the Arushi murder, regarding which no clue has yet been found. The RBI team is also scanning branches where the money was supplied from the Dumariagunj branch's chest.

The initial seizure of Rs. 5 lakhs was made from one Abid and seizures were reported from all over Uttar Pradesh -- Aligarh, Lucknow, Gonda, and some places along the Bihar border. This led authorities to suspect that counterfeit currency worth about Rs. 40 crore may have been in circulation in UP alone. It was Abid who named Sudhakar Tripathi, a cashier at the Dumariganj branch of the SBI, as the co-accused. Sudhakar was immediately arrested and a search of his house yielded Rs. 7.2 lakhs of unaccounted money of which Rs. 50,000 was in fake notes. On the basis of the information given by Sudhakar after interrogation, the RBI was requested to screen the currency notes in its chests in various, particularly those along the Indo-Nepal border.

The UP police also seized fake currency from Shameem, Mahandi and Saleem in Alligarh. One Sohail of Gonda had Rs. 25 lakhs in fake currency on him, and he was working with Sanjay Paswan, Vinod Kumar and Sanjay Patel of Bihar. Three other persons, Momin, Anisuddin and Pramod have also been arrested in Aligarh. All these and other operators, who are still roaming free, have made hefty profits through these transactions estimated at several crores. The SBI cashier must have also been similarly provided to make him circulate fake currency through the official channel, the interrogation of none of those arrested has yielded any definite clues as to the origin of the counterfeit currency, except that it has come from abroad. In what manner it is linked with terrorist funding in the country and the purpose for which it was smuggled in will be revealed by further interrogation, which should involve the intelligence agencies also. The Enforcement Directorate is also conducting its own inquiry. But it needs coordination on the part of various agencies, including those dealing with internal security, to unravel the truth in this case.

What has struck the investigating authorities is these fakes are indistinguishable from genuine notes due to their fine printing done on sophisticated machines, with watermarks and other distinguishing features incorporated. The serial numbers of the seized notes tallied with genuine notes in the RBI's chest in the SBI's Domariaganj branch. This means that the gang involved had first obtained the serial number of the genuine notes and transmitted the information to the printers who put the same numbers on the fake notes to facilitate their undetected circulation through the banking system. ISI has long since been planning India's economic subversion through large scale circulation of fake currency, with the help of smugglers like Dawood Ibrahim, who are in Pakistan under ISI's protection. Some of those arrested have been in regular touch with handlers in Nepal, Pakistan and Bangladesh, pointing to a clear ISI link. Fake currency is often used by terror groups to finance their activity and pay militants who whip up anti-India feelings.

The matter also figured at the recent meeting of the state police chiefs called by the Home Ministry to review the security scenario in the aftermath of the attacks in Bangalore and Ahmedabad. It was pointed out that terror funding, including through fake currency, needs to be thoroughly investigated. According to unofficial estimates fake currency worth Rs. 100,000 crores has been in circulation to weaken the Indian economy. This should make the authorities sit up and take serious note of terrorism financing, which has not received much attention so far. It is reported fake currency is smuggled through UAE, Sri Lanka, Thailand, Malaysia, Bangladesh and Nepal to diversify the sources. The notes are of high quality replicating most of the security features.

Following the alert, the Center's Financial Intelligence Unit is examining records of more than 600 financial transactions it believes could be linked to terror funding and other suspicious activities. The list has been compiled by its agencies including the IB, RAW, RBI and SEBI. The scam has been detected in just one branch of the State Bank, but it is anybody's guess how many other branches of the same bank, or other banks have been penetrated by the racketeers and what is the actual volume of fake currency actually in circulation. The amount of fake currency recoved last year went upto Rs. 8 crore, which was a substantial increase over the previous year. But this, according to former CBI Director Vijay Shankar, represents only "the tip of the iceberg". Union Home Secretary Madhukar Gupta agrees that the matter needs organized, systematic and in-depth investigation and he has asked the states to set up separate cells for organized crime including smuggling of currency under a competent officer.

If past experience is any guide, the states run out of breath after a brief while in investigating Pakistan-sponsored terrorism cells and links and its funding through organized, as well as, unorganized channels. The ISI often involves international smugglers like Dawood Ibrahim and Hawala operators in its enterprise and they have considerable money power to scuttle such investigation. Had the states' police and intelligence agencies performed their duties efficiently, it would not have been possible for Pakistan-sponsored and financed terror groups to remain active and conduct daring bomb attacks in the cities of their choice. Numerous conferences of chief and home minister and DGs police have been convened to discuss steps to improve police and intelligence performance, but the follow-up action has been disappointing.

EMAIL THIS NEWS COMMENTS POSTED BY S.P.VERMA on October 12, 2008, 7:07 pm
In fact, every bank should have a counter for public to teach, how to detect fake currency.the Govt. may develope a devise , that too handy, so that every body could detect the fake currency before taking. this will leave the fake currency out of circulation.