The Jammu and Kashmir Police on Thursday said it had busted a hawala racket being operated to fund Lashkar-e-Tayiba cadres in the state.
A senior police officer said in Srinagar that a local trader had been arrested by the special operations group of the state police from the uptown Hyderpora locality of Srinagar a few days back.
"The interrogation of the arrested trader, who belonged to central Kashmir's Budgam district, revealed that he had been involved in running a hawala racket meant to fund the LeT in the state," the officer told rediff.com.
"On the revelations made by the arrested local trader, two other traders -- one in Jammu and the other in Amritsar -- were arrested and interrogated," he said.
Revealing the modus operandi of the racket, the police officer said these traders would receive goods through trans-Line of Control trade from Pakistan-occupied Kashmir and sell them in the state without sending any trade consignments in return to the traders in Muzaffarbad.
Trans-LOC trade between Srinagar and Muzaffarabad has been going on through north Kashmir Baramulla district in the Valley and through Rawalakote in the Poonch district of the Jammu region. The trade is done purely on a barter basis wherein goods are imported and exported between the traders in the two parts.