10 WEDNESDAY, NOVEMBER <strong>16</strong>, 20<strong>16</strong> DT World India’s fight against fake currency • Tribune International Desk Since <strong>November</strong> 8 midnight, Indians have been experiencing a truly historic yet confusing period after the government took the unprecedented step of demonetising Rs500 and Rs1000 bank notes. Prime Minister Narendra Modi, in his address to the nation, stated one of the reasons for this policy was to counter the rising menace of fake Indian currency notes. Counterfeiting money has been prevalent throughout history and is sometimes called the world’s “second oldest profession.” Traditional counterfeiters in most cases are individuals or a group who counterfeit money for their own profit. But during modern history, a new phenomenon appeared: states involved in counterfeiting the currency of enemy states to destabilise their economy. For example, during World War II, Hitler initiated “Operation Bernhard” and counterfeited British pounds. As a result Britain had to withdraw most of its currency notes. An Indian bank teller hands over notes as people gather inside a bank to deposit and exchange 500 and 1000 rupee notes in Amritsar on Tuesday AFP Fake Indian currency notes on rise In India, the circulation of fake Indian currency notes (FICN) has been on the rise, according to the Reserve Bank of India’s (RBI) annual reports. The year 2014-2015 saw a steep rise, with 594,446 FICN detected, up from 488,273 in the year 2013-14. When it comes to the type of notes counterfeited in 2014-15, RBI data showed that counterfeited Rs500 notes were most common, with 273,923 recorded. Rs100 and Rs1000 notes were the second and third most counterfeited bills, respectively. India’s Financial Action Task Force (FATF) report of 2013 found that the Indian rupee was the ninth most counterfeited currency in terms of its value and stood third in terms of the number of FICN detected around the world. This is a grave concern to India and if not dealt with would have had serious implications as counterfeit currency can reduce the value of the currency and increase inflation. Transit points of fake currency As reported by various sources, most counterfeit Indian currency notes are printed in Pakistan. From Pakistan, FICN are either moved directly into India or make their way through a network of other countries. Major transit points include India’s neighbouring countries Nepal and Bangladesh. Dubai is another route that the traffickers use to smuggle the fake currency notes into India; other transit points include Thailand, Malaysia, and Sri Lanka. China is emerging as a new transit route. Pakistani nationals were involved in 48% of FICN cases in Thailand, Malaysia, Myanmar, and Sri Lanka. Printed in Pakistan, distributed by ISI India’s Ministry of External Affairs for the last decade has consistently shown concern over ISI and its involvement in printing and distributing FICN. DRI sources have also voiced concern over the high quality of FICN, which makes them difficult to distinguish from real notes. Media reports from Bangladesh claim that the fake notes are printed at government presses in Karachi, Lahore, Peshawar, and Quetta with the support of ISI. Some of the important revelations that indicate ISI’s role in FICN have come from David Headley, who was convicted for his role in the 26/11 Mumbai attacks. In his statement, Headley mentioned that Major Iqbal, who was his ISI handler, gave him FICN for circulation and use in India. Another breakthrough in allegations of direct involvement by Pakistan authorities and ISI in FICN was the arrest of Syed Abdul Karim Tunda in 2013 at the India-Nepal border. According to the police, Tunda received several consignments of FICN arranged by an ISI brigadier. Economic terrorism FICN, as mentioned earlier, could be seen as a form of “economic terrorism” practiced by external sources to damage India’s economy. Economic terrorism refers to the behind-thescenes manipulation of a nation’s economy by state or non-state actors. The printing and circulation of FICN provides dual benefits for terrorist organisations targeting India: the circulation of FICN threatens India’s economy while the profit that is earned from doing so is used to fund covert activities targeting India. News sources claim that ISI makes an annual profit of Rs5bn ($73 million) from these activities, given an average of 30 to 40% profit on the face-value of the notes. The same money is said to be used to fund terrorist groups in India. India’s fight to uproot fake currency Given the multidimensional aspect of FICN, the problem needs to be dealt with in a holistic manner. Relevant agencies need to work together. Already, separate organisations have been taking steps. In 2010, India joined the Financial Action Task Force (FATF), an intergovernmental body seeking to fight money-laundering and terrorist financing. In 2014, the Reserve Bank of India announced the withdrawal of notes issued before 2005, another measure to tackle the issue of FICN and improve security features. Modi, while addressing the nation last week, implicitly accused Pakistan by saying that “enemies across the border” have been responsible for the circulation of FICN in India. The decision to withdraw Rs500 and Rs1000 notes from circulation could have a massive positive impact by eliminating FICN from India’s economy. The Rs500 note in particular is the most commonly counterfeited note in India and demonetising it is quite a remarkable move to eradicate the threats emanating from FICN to the Indian economy. • [This is an excerpt of a The Diplomat article, which can be found at http://bit.ly/2ezQXpH]
Advertisement 11 WEDNESDAY, NOVEMBER <strong>16</strong>, 20<strong>16</strong> DT Like what you’re reading? SUBSCRIBE TODAY Call: 0<strong>16</strong>1-I-WANT-DT (0<strong>16</strong>14926838) | Visit: dhakatribune.com/subscribe Dhaka Tribune
- Page 1 and 2: SECOND EDITION WEDNESDAY, NOVEMBER
- Page 3 and 4: Is he a war criminal? News 3 WEDNES
- Page 5 and 6: News 5 WEDNESDAY, NOVEMBER 16, 2016
- Page 7 and 8: News 7 WEDNESDAY, NOVEMBER 16, 2016
- Page 9: World Trump nominees already worry
- Page 13 and 14: Business 13 DT WEDNESDAY, NOVEMBER
- Page 15 and 16: Business 15 DT WEDNESDAY, NOVEMBER
- Page 17 and 18: Feature 17 WEDNESDAY, NOVEMBER 16,
- Page 19 and 20: Biz Info 19 WEDNESDAY, NOVEMBER 16,
- Page 21 and 22: Opinion 21 O intellectuals, where a
- Page 23 and 24: An Orwellian democracy Should the E
- Page 25 and 26: Sport 25 DT WEDNESDAY, NOVEMBER 16,
- Page 27 and 28: Sport 27 DT WEDNESDAY, NOVEMBER 16,
- Page 29 and 30: Downtime 29 WEDNESDAY, NOVEMBER 16,
- Page 31 and 32: Showtime Jaya Ahsan wrapped up Kaus
Change language