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Fake currency menace haunts security agencies

By Vicky Nanjappa in Bengaluru
July 31, 2009 13:49 IST
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The menace of fake currency which is used to fund terrorism in India continues to haunt Indian security agencies. Intelligence agencies have warned time and again about this threat to the Indian economy and how it could destabilise the country.

Even as security agencies and Reserve Bank of India officials work overtime to overcome this problem, Pakistan based terror groups with the blessings of the Inter Services Intelligence continue to flood Indian markets with fake currency and distribute it among their agents.

The ISI has decided to concentrate this trade on a large scale in Hyderabad and Kerala since there are a lot of persons from here who work in the Gulf. The IB says that poor labourers are falling easy prey to this racket and help in bringing the fake money into India.

Mumbai 26/11 aftermath

In the aftermath of the horrific Mumbai terror attacks last November, the circulation of fake currency had come down for a while. There was a crackdown on several operatives who were into this business. The Indian security agencies too had come up with various measures to check the circulation of fake currency.

The IB says that the fake currency racket is a major income grosser for the ISI and they would do anything to ensure that the operation continues.

Following the Mumbai attacks and the crackdown, the ISI changed it methods. For starters, they set up two brand new printing units in Karachi and Lahore. They have started importing paper from European countries and are using them so that Indian security agencies find it difficult to identify the fakes.

The second plan was to introduce a new route. Apart from sending in fake notes through labourer returning to India, terror groups are also using the route through Sri Lanka into Tamil Nadu. The IB also says Karimnagar and Nizambad in Andhra Pradesh are hot spots for the fake currency racket.

Security agencies say the transportation of fake currency from the Jammu & Kashmir border and also areas around Rajasthan and Bangladesh have come down comparatively. However, the terrorists are using the sea routes through Tamil Nadu and Gujarat. The currency is sent into Sri Lanka and then transported into Tamil Nadu from where the circulation begins.

Case statistics

At present there is around Rs 170,000 crore worth of fake currency in circulation. Although nearly 3,170 cases relating to fake currency have been booked till date, the conviction rate is appaling. Advocates arguing these matters say that only the small fries are caught, but the big ones end up getting away since the persons brought before court have very little information.

Kingpin still at large

The ISI has clearly taken the help of the Dawood Ibrahim gang to further their business. The link is clear thanks to two men -- Babu Gaithan and Aftab Bhakthi. These two men operate out of Dubai and report directly to the Dawood gang. They are the ISI's point men to ensure that fake currency is pushed into the Indian markets at regular intervals. Their job is to collect the fake currency from Pakistan where it is printed and then ensure that it is circulated.

They make arrangements for the transport through the sea route and also use the labour force entering Andhra Pradesh and Kerala to circulate fake notes.

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Vicky Nanjappa in Bengaluru