Pakistan’s code word for high quality Fake Indian Currency Notes (FICN) is ‘RBI’ — Reserve Bank of India — which controls the monetary policy of the Indian rupee. With Prime Minister Narendra Modi’s demonetisation policy abolishing Rs 500 and Rs 1,000 rupee notes, Faizabad bus stand in Rawalpindi, Pakistan has lost its charm for Lala, a former ISI officer, who coordinates the smuggling of FICN to India.
A retired brigadier-rank officer of the Pakistani Army, Lala, till last week was the key figure to procure and supply ‘RBI’ or FICN through an intricate network of couriers and smugglers. But, since Modi activated his ‘original RBI’ to junk high-denomination notes last week, there are virtually no takers for Lala’s ‘RBI bundles’ across the entire stretch of Muni Road in Rawalpindi, the northernmost part of Punjab province.
The chatter from across the border, intercepted by intelligence agencies, indicates that Modi’s action against black money in India has demolished a section of the ISI headquarters in Rawalpindi, where many fugitives from militant outfits like Babbar Khalsa, Khalistan Zinadabad Force and Indian Mujahideen used to hold meetings with ISI officials to infuse fake currency into Indian’s financial system with the twin motives of economic destabilisation and financing terror activities in India.
The supply source
The ISI used to provide lucrative exchange rate with a profit of nearly Rs 300 per fake Rs 1,000 rupee note. A margin of these profits was paid by ISI to the field agents like Lala and underworld modules with multinational networks, popularly known in Pakistan as ‘office’.
Said ‘office’ was responsible for running an ‘hub and spoke’ business model that included smuggling FICN through both direct and indirect routes. The direct route was Munabao-Khakrapar and the Attari border, while the indirect route usually ran through the UAE, Thailand, Malaysia, Sri Lanka and Singapore before arriving in Kathmandu and Dhaka.
The top secret intelligence agencies dossier reviewed by this writer for Firstpost show that China was recently included in ISI’s smuggling route to exploit commercial courier services. Shenzhen, a major city in Guangdong Province, located north of Hong Kong, had become a major hub for 'office’ which used to export ethnic garment containers with carefully concealed FICN for onward transmission into India through Nepal and Bangladesh.
The ‘office’ used to run the operation with Suleman and Mulla in Bangladesh and Rana and Ansari in Nepal. Ansari, a Nepali politician from Lalitpur and close aide of Dawood Ibrahim, was arrested by Nepal Police in January 2014. However, until last year, Ansari was said to have maintained close links with ISI officials posted at the Pakistani embassy in Maharajgunj Chakrapath in Kathmandu.
It is no secret that Pakistani embassies abroad are using their diplomatic channels for FICN circulation and the crackdown started by Modi may perhaps render many undercover ISI officers jobless in South Asian countries. The secret dossier mentioned above said:
“There are a number of intelligence inputs available to indicate the involvement of Pakistani officials in Bangladesh, Nepal and Thailand of having assisted, managed and supplied FICN at times using the diplomatic bag to wholesale operations in those staging countries. The diplomats, who were associated with FICN trade, were also known to be involved in counter-intelligence operations against Indian diplomats in those countries.”
There are no authentic reports about the total circulation of FICN, however, inputs from various agencies and organisations involved in the detection of counterfeit notes suggest that the ISI may have pumped in over Rs 4,500 crore worthof fake currency into India’s financial system.
As far as recoveries and seizures of FICN are concerned, government agencies had analysed three time periods — 2005-07, 2008-10 and 2011-13 — including 78 overseas seizures.
“Of the 78 foreign seizures, there was the direct involvement of Pakistani nationals in 35 cases with 44 Pakistani nationals being arrested. Of the 28 seizures at foreign airports, 12 were from flights that originated directly from Pakistan while all others from flights transiting a staging-post country but originating in Pakistan,” the secret government note said.
Plugging the gaps within
The Central agencies responsible for generating and analysing economic intelligence are also monitoring the sources from where the most fake currency was either intercepted or reported, to strengthen the gaps, if any. With the introduction of new currency, which is learnt to have used highly specialised and exclusive technology, agencies believe that close imitations of genuine notes will be virtually impossible, unless ink supply by international companies to sovereign governments are compromised.
The Financial Intelligence Unit (FIU-IND) has already started analysing Counterfeit Currency Reports (CCRs) from banks that will help in tracking the supply sources in case the fake currency menace stages a comeback in the next couple of years.
The Unlawful Activities (Prevention) Act (UAPA) makes production and distribution of high quality FICN a terrorist offence and Intelligence Bureau (IB) recently in a note observed that CCRs collected and analysed by FIU should be shared with other agencies for immediate action as banks continue to report difficulty in registering FIRs.