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Pakistan's export of fake currency via Nepal

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By VK Shashikumar Issue: Vol. 23.4 Oct-Dec 2008 | Date: 13 January, 2012 Email Print Share:

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At most places along the 751 km Bihar-Terai contiguous no-mans land on the India-Nepal border are dirt tracks. Solitary signpost marks the international boundary here. On one side is Bihar, on the other Nepals Terai region. The border is largely unmarked, unguarded and highly porous, the people who live in these parts desperately poor. Crossborder smuggling, naturally, is rampant. Everyday people simply cycle across the border with illegal goods, most of them essential supplies. I am taking vegetables and rice across the border, says Saradeb Patel, a resident of a Nepalese border village, Bhansar Tola Sirisya, some 20 kms from Birganj. But increasingly, a new and dangerous kind of contraband is making its way across the border from Nepal to India. The Indian government calls it FICN fake Indian currency notes. Birganj, the biggest town in Nepals Terai region is now a transit point for almost all the fake currency entering India. At the Birganj police headquarters we ask the Superintendent of Police, Yogeshwar Rom Khami, if he has any fake notes with him. He produces hundreds. We have confiscated more than 400,000 rupees. People from both sides are involved, he says. Law enforcement officials in Nepal and India admit that the long border is porous and security infrastructure weak and inadequate. Taking advantage of political uncertainty in Kathmandu Pakistans Inter Services Intelligence has set up a large and resourceful network of agents from Kathmandu to Birganj and all along the border to push hundreds of crores of counterfeit Indian currency from Nepal to India. Their objective is to fund terror and sabotage the Indian economy. At the crack of dawn, the Raxaul-Birganj crossing stirs awake. As has been the tradition for centuries, people on foot, cycles and Tongas cross the border. Ancient cultural, ethnic and linguistic bonds, the inescapable intertwining of geographical contiguity and a certain irreverence to the concept of boundaries have all contributed to making the India-Nepal border the most open and unique across the world. The official Raxaul-Birganj border crossing on the land border with Nepal is where over 80 percent of Indias legitimate trade with Nepal is conducted.

As the sun rises, the policemen at the Matiarwah police post on Nepals border slowly wake up. At the Belderwah camp just across the border, the soldiers of the Sashasthra Seema Bal get to work. The border market is already busy. National boundaries hold little meaning in these parts. This is an open border, and has been one for centuries. On the Indian side unauthorized agents of the police collect bribes from almost every traveler. When the policemen see us filming them, they get aggressive. The Land Customs post in Raxaul is, perhaps, one of the most corrupt customs posts on the Indian border. Indian and Nepalese law enforcement officials have confirmed that several hundred crores of fake currency passes through this border every year. Admittedly the level of corruption on the Nepal side of the border is simply mind boggling. The sheer transparency and nonchalance with which the Nepalese border police take bribe is stunning. While the Indian customs and police officials were ready to confront when the camera was focused on them, in Nepal we are taken aback by utter disregard to the prying camera. Nobody stops us from filming these border officials extorting money from people entering Nepal. No questions are asked, no fingers pointed. It comes as no surprise that thousands of fake currency couriers cross this border every month.

Law enforcement officials in Nepal and India admit that the long border is porous and security infrastructure weak and inadequate. Taking advantage of political uncertainty in Kathmandu Pakistans Inter Services Intelligence has set up a large and resourceful network of agents from Kathmandu to Birganj and all along the border to push hundreds of crores of counterfeit Indian currency.
We are introduced to one such fake currency courier in Birganj who will smuggle anything if the price is right. He tells us that in a village house some 20 km from Birganj a consignment of 20 lakh of fake Indian currency has arrived from Kathmandu and that he has been tasked to carry a small bundle from that consignment across the border. On his cycle carrier is a seemingly innocent red bag. We are told that this bag contains hundreds of fake Indian currency notes. As we watch, he casually crosses the Nepal customs and immigration posts, goes past the Shankaracharya Gate, and crosses the over-bridge. Within minutes, he is in India. On the Indian side we catch up with the courier. Hundreds of couriers surreptitiously bring bundles of fake currency, like this, into India everyday, neatly packed and hidden in small consignments of smuggled goods or personal belongings. Criminal gangs also smuggle arms and narcotics across the border under the pretext of ferrying essential survival supplies. At the district police headquarters the police showed us a truck with an Indian registration number that was transporting fruit juice from Dabur factory in Birganj to India. The truck was seized when the police found several kilos of heroin carefully hidden below the fruit juice cartons. Over the last year the biggest cross-border activity now, police

say, is the smuggling of fake Indian currency. This is an open border. We cant control anti-social elements without cooperating with each other, says Khami.

Along the border Indian and Nepalese police have set up informal coordination mechanisms. For instance, the SP of Birganj and the SP of East Champaran district in Bihar are regularly in touch over their mobile phones. Police officials of both countries regularly meet at Raxaul or in Birganj. At junior levels, too, local border police on both sides keep in touch with each other. Even the police informers all the along border in many cases are common. This fantastic coordination and common ground between police forces in both countries should have resulted in effective border management. But thats not the case because the fake currency racket also fattens the purse of police and customs officials on both sides of the India-Nepal border. We met fake currency dealers and couriers in Nepal. They told us that the ISI is pushing 100 crores of fake currency every month into India from Nepal. They also told us that by 2010 nearly 10,000 crores of fake currency will be in circulation in India. Sources in Nepals law enforcement agencies arrange for us to meet an agent who works for Pakistans Inter-Services Intelligence, or ISI. He is a double-agent and a vital source for the Nepali and Indian intelligence. Sources in Nepals law enforcement agencies arrange for us to meet him at a safe house in Birganj. The man has brought with him wads of fake Indian currency notes. He says they are from a fresh consignment. The notes look real, feel real and even have a water-mark.

For Pakistans ISI and gangster Dawood Ibrahims D Company, Kathmandu is a crucial base in the financial terror campaign against India, and Kathmandus Tribhuvan International Airport an important hub.
The Pakistan Embassy in Kathmandu is the nerve centre for fake currency operations. The ISI agent told us that Khalid Mehmood, a senior ISI officer working in the Embassys Education Department, runs the network, with the help of another ISI officer, Jamil Alam. With Nepal still dealing with its transition from monarchy to democracy, the ISI has lost no time in setting up a country-wide network, aided by gangster Dawood Ibrahims D-Company. Certainly there are some nations and agencies behind this operation. A common person cant identify what is fake and what is real. I cant say anything sitting on this chair, says Khami. The mafia gang of D Company transports FICN mostly of Rs 500/- and Rs 1,000/- denominations through a global operation supervised by the ISI. Nepalese law enforcement sources gave the photographs of some of the ISIs key operatives in Nepal. Sheikh Jikar Ullah, a known criminal and D company agent, is also an ISI backed dealer in fake currency in Kathmandu. And Lal Mohammad, another D Company agent in Kathmandu, is used by the ISI to ferry fake currency from Bangladesh and Thailand to Nepal on international flights. Intelligence sources say Mohammad has a direct link to Mufti Abdul Hannan, the chief of the terror outfit, Harkat-ul-Jehadi Islam or HUJI.

Sanjay Kumar Giri lives in Bhansar Tola Sirisya, a border district in Nepal. He regularly smuggles essential items, but admits that there are others who smuggle very different goods. Yes, people smuggle fake Indian currency. I cant talk about fake currency dealers. They are big and powerful people and I will not talk about them, he says. Driving along the India-Nepal border, one is struck by its openness and contiguity. Cross-border trade, ironically is only allowed at one point on this porous border the Rixaul, Birganj crossing. And that has made smuggling across the rest of the border an everyday activity. There should be some serious effort to convert the smuggling economy along the border into legitimate border transactions, says Om Prakash Shikariya, a financier in Birganj and allegedly a stake-holder in Laxmi Bank. At the Raxaul border crossing, assistant customs commissioner, Shaukat Ali, says his men keep round the clock vigil on fake currency couriers. My team keeps 24/7 vigil on fake currency racketeers. But its a tough job, he admits. In the remote border region of Belderwah, the Sashashtra Seema Bal camp in-charge says his men have choked the smuggling of fake currency. There is smuggling but we have stopped itWe patrol in the day time and set up check posts at night, says Inspector Ramesh Bhandari, Inspector, SSB. But on the Nepal side, local officials admit that the sheer length of the porous border makes it almost impossible to police. We cooperate with the Indian police. Whenever we are informed over the mobile phone or wireless, we take action. But we cannot deny the fact that criminals are taking advantage of the porous border, says Shivnath Yadav, Head Constable, Nepal Border Police. Babban Singh, an independent MP in Nepals Constituent Assembly, says that the ISI has bought the support of many government officials in Nepal. Singh is a history sheeter and is wanted by the Nepalese police for leading a mob last year which slaughtered nearly 200 Maoists in Terai. Fearing for his life he lives in Raxaul most of the time and occasionally makes forays to Birganj. When the Constituent Assembly sessions are on he goes to Kathmandu. His supporters make it a point to mention his claim to fame. Singh ji drove the Maoists out of Terai, is the constant refrain. Singhs avowed political aim is to destroy the ISI network in the Terai region. Politicians and policemen are involved in fake currency. Otherwise how else can so much fake currency come in through Kathmandu, he says. Nepals politicians and policy makers have a different description for fake currency. They call it the D currency, all of which comes here at the Tribhuvan International Airport. For Pakistans ISI and gangster Dawood Ibrahims D Company, Kathmandu is a crucial base in the financial terror campaign against India, and Kathmandus Tribhuvan International Airport an important hub. This airport is where the fake notes enter Nepal. But their journey begins in Pakistan. The notes are first printed in ISI printing facilities in Multan and Quetta, on currency standard printing paper imported from London. Increasingly the ISI is also using printing facilities in Bangladesh and Thailand. Counterfeit Indian currency is printed on currency standard security paper imported from London. Over the years it has become increasingly difficult to distinguish it with the original Indian currency because of the state-of-the art printing technology employed by the ISI. Gone are the days when fake currency was printed by using scanners and computer printers. The genuine Indian currency note has the following security features:

Silver Bromide thread with prominent RBI marks in Hindi and English Three watermarks on each note i.e., a. Ashoka Pillar or Gandhijis sketch/caricature b.
Denomination and c. R.B. I are prominent

Sprinkled blue dots all over the note when seen in UV light The digits 500 superimposed on the right side, when seen horizontally

Only Reserve Bank of India officials with the requisite expertise have the ability to examine and distinguish fake and genuine currency.
Security and strategic experts would be alarmed to know that most of the security features including the latest colour coding on the Rs 500/- and Rs 1,000/- denomination notes have been successfully copied and incorporated in the counterfeit currency. There are possibly only two factors that enable an expert banker to distinguish the fake from the real. First, the superimposed 500 digits are not visible in a fake currency note when seen horizontally. Second, only experts and not laymen can separate a fake and real currency by its thickness feel. But its a skill that is hardly prevalent at the level of regular banking and commercial transactions. In fact, the ISIs sophisticated printing presses in Thailand and Bangladesh have successfully managed to replicate the optical fibre marks that are only visible when a currency note is exposed to Ultra Violet (UV) lamp. These appear like sprinkled blue dots under UV light spread all over a currency note. The optical fibre marks embedded on a fake currency glow as genuinely as in a real currency note when exposed to UV light. Even the security thread glows when exposed to UV light. But there is one essential difference. When a currency note is exposed to UV light and slowly tilted, then in a genuine currency note the silver bromide strip changes from silver to a greenish tinge. Only Reserve Bank of India officials with the requisite expertise have the ability to examine and distinguish fake and genuine currency. These officials who have examined the counterfeit currency have listed the following markers to distinguish fake currency:

The Series prefix and distinctive numbers are smaller in size in a counterfeit currency note. Alignment of Series prefix and distinctive numbers is misplaced in a fake currency note. Thick lettering has been used for printing the issuing authoritys name. So the lettering of Reserve
Bank of India and the guarantee and promise clauses printed on a currency is another feature that distinguishes a fake currency from a real one. Continuity of security thread is not maintained Watermark at the left hand side bears a thicker sketch of Mahatma Gandhi in a counterfeit note. Also the sketch is not detailed and appears cartoonish. On a genuine currency note Mahatma Gandhis sketch is detailed.

The ISI transports the fake notes through the state-owned Pakistan International Airlines, or through the diplomatic bag to Dubai, Kuala Lumpur, Hong Kong, Bangkok, Colombo and Dhaka. From these locations ISI-backed couriers like, Azhar, bring consignments of fake currency on PIA or other international flights to Kathmandu. Again the diplomatic bag is widely misused to bring consignments of fake currency to Kathmandu. From Kathmandu the notes are taken to Birganj , and from here they are pushed into India across the porous border through a vast network of couriers. The Raxaul railway station is the biggest conduit for fake currency routed from Birganj. From here the notes travel to Patna, Kolkata, Delhi, Mumbai and Bangalore. Nepali law enforcement officials have also tracked two other routes through which fake currency enters India.

The ISI transports the fake notes through the state-owned Pakistan International Airlines, or through the diplomatic bag to Dubai, Kuala Lumpur, Hong Kong, Bangkok, Colombo and Dhaka.
One is through Beherwa village on the Nepal border. From here couriers take fake currency consignments across the border to Suguali and then through rail to Gorakhpur, Lucknow, Delhi and Mumbai. The other route is from Birganj to Biratnagar on the Nepal border. From here fake notes make their way across the border to Darbhanga, Inerwa, Siliguri and Kolkata. Indias National Security Advisor MK Narayanan acknowledges

the in-flow of fake currency from Nepal to India. Its a matter of concern for the financial establishment and for security establishment, and we are aware. It comes through Nepal, Bangkok and various other centres, he says. Nepalese intelligence sources say the Everest Hotel in Birganj is a key transit hub for the ISIs fake currency operations. ISI operatives in Kathmandu get 500 rupees for every 1000 rupee of fake currency they give to dealers in Birganj. These dealers in turn pay couriers 500 rupees for every consignment of one lakh rupees in fake currency across the border to Raxaul and other small border towns in Bihar. Buyers in India then buy the fake notes 700 rupees for 1000 rupees of fake currency. Indias National Security Advisor has admitted that the government is aware of the ISI-D Company fake currency racket. Lot of it is being used for purposes like terrorism; militancy etc. a lot of it is purely for economic gain. From the point of view of financial establishment the percent of fake Indian currency is not even a speck in terms of numbers. From the point of view of security establishment, I think it is a matter of concern because then it is used for purposes which are anti national, he says. But senior members of the Birganj Chambers of Commerce say they are surprised the Indian government is not doing more to counter the growing influence of the ISI in Nepal. Along the border Muslim settlements have grown over the years. The ISI network and its activities have also grown over time, says Shikariya. The Indian government acknowledges that fake currency is indeed a problem. But one wonders why it is not putting pressure on Nepal to monitor, detect and prevent the fake currency from operating in Nepal. Is it because of the involvement of influential Nepali businessmen and politicians in the fake Indian currency racket?

Senior members of the Birganj Chambers of Commerce say they are surprised the Indian government is not doing more to counter the growing influence of the ISI in Nepal. Along the border Muslim settlements have grown over the years. The ISI network and its activities have also grown over time.
Pakistans Inter Services Intelligence has roped in a very influential person to organize and operate the fake currency network. This man is Yunus Ansari. Reliable and senior Indian intelligence officers and Nepalese law enforcement officials and several politicians, too, confirm that Ansari is ISI and D Companys main operative in Nepal. He runs two FM radio stations and several business establishments, and has also reportedly funded the setting up of a TV news channel. His father Salim Mian Ansari of Nepal Samajwadi Party was a cabinet minister in Nepal when King Gyanendra was in power. And Ansari himself is a close friend of Gyanendras son, Paras, who has currently taken refuge in Singapore. Nearly 75 percent of the fake currency carriers employed by Yunus are Nepali girls. He began this illegal business with 1 lakh FICN a decade ago when he accompanied his father, Salim Mian to Egypt. In Cairo ISI officials met up with Yunus and convinced him to be their front man. Within a decade the ISI has managed to widen the network of FICN operatives. The other prominent Nepalese front men are Altaf Hussain, alias Munna. He has put in place a network of carriers all of whom are from the Terai region of Nepal. Upendra Choudhary is another prominent agent of the ISI in Nepal involved in cross border fake currency operations. Two ISI officials in the Pakistan Embassy in Kathmandu, Kamal Ahmed and Arshad Mehmood, were instrumental in recruiting petty smugglers along the border as fake currency dealers for selling FICN in Indian border towns for 40 to 45 percent of its value. Currently, a senior ISI officer, Jamil Alam in the Pakistan Embassy is supervising the agencys fake currency operations on the IndiaNepal border. Salim Mian is now bed ridden and virtually on his death-bed. But his long standing association with the ISI has benefited many of his associates who have made a killing by joining ISIs FICN. Ram Chandra Kushwaha, alias Pyasi, who was Salim Mians personal assistant and is now a leader of NCP (UML) and Nandu Srivastava, criminal

and brother of the former Mayor of Birganj, Bimal Srivastava have profited heavily by becoming business partners in Ansaris FICN racket. Yunus Ansari is also associated to businessmen of Indian origin, settled in Birganj. In Kathmandu, its an open secret that Ansari leaned on his Paras (former prince) connection to become the don of fake Indian currency in Nepal a fact confirmed by intelligence sources in Nepal and India. Of course the Government knows. Can you explain this? five lakh fake currency was caught at Simra airport. Within 22 hours the fake currency became real. How did that happen? questions Jitendra Sonar, MP, Constituent Assembly. Sonar knows what hes talking about. His main political rival in the election to Nepals Constituent Assembly was Yunus Ansari. Sonar won the election. The man you are talking about contested the Constituent Assembly elections. But since the government is in transition and in any case is an interim government, it is not focused on this issue, says Sonar.

The fake currency network runs so deep that Indian-origin businessmen dont even deny allegations that they are involved in the racket.
Ansaris fake currency network is the biggest in Nepal. His consignments arrive in Kathmandu on international flights. His men then take the bogus money to a man named Someshwar Ansaris henchman in Birganj. And from here smaller consignments are carried by couriers to various parts of India. The other associates of Yunus are Jalim Mian and Nasir Mian from Jagannathpur in Parsa district, Asgar Ali from Chhapkaiyan in Birganj, Idris Mian from Parwarnipur near Birganj, Mumtaz Ahmed Ansari, Nasrullah, Shahid Akhtar and Roshan Khan from Birganj. Sheik Jakir Ullah used to work for Ansari, but the ISI has now helped him set up his own network. The third big network is owned by Altaf Ansari alias Munna, and operated by Lal Mohammad. The ISI uses this network to bring in fake currency from Bangladesh to Kathmandu. Culprits caught are mostly couriers and we dont know who are behind the scenes. But we can guess, says Khami. There is no official report of D Companys presence in Nepal. But there have been reports in newspapers, says Sonar. The fake currency network runs so deep that Indian-origin businessmen dont even deny allegations that they are involved in the racket. Ashok Temani, Vice-President of the Birganj Chambers of Commerce and Industry, admits that Nepals business hub has indeed become a transit point for fake Indian currency. We cannot deny the fact that Birganj has indeed become a transit hub for fake Indian currency, admits Ashok Temani, VP, Birganj Chambers of Commerce and Industry. The business community in Nepal is naturally worried about the wide circulation of fake Indian currency in their country. Om Prakash Sharma, a Nepali Congress MP in the Constituent Assembly says private industry here is concerned about the impact the fake Indian currency can have on the economy. Fake currency is a problem that Nepal and India must tackle. Or else the value of the rupee will collapse. People are being cheated, he says. The ISI selected the Terai region of Nepal for FICN operations because of the following reasons:

Unguarded and porous border Extreme poverty and under-development on both sides of the border High unemployment along the India-Nepal border areas The presence of criminal gangs in the borders and smuggling mafia. Besides the Terai is also a refuge for criminals from Bihar, Uttar Pradesh and West Bengal. A massive presence of D company agents in the Terai who are patronized and funded by ISI

If Pakistan succeeds-pushing thousands of crores of fake Indian currency into India from Nepal, as easily as it is doing now-this kind of

financial terrorism will have serious implications for the Indian economy.
So serious is the issue of cross-border flushing of FICN that the recent two day Home Secretary level talks between India and Nepal, which concluded on October 31, 2008 reviewed the security and management of the porous IndiaNepal border. The 16-Member Nepalese delegation was led by Dr. Gobinda Prasad Kusum, Secretary, Ministry of Home, Government of Nepal, while the Union Home Secretary, Madhukar Gupta led the Indian team. The discussions on security related issues centered on effective cooperation in combating terrorist activities including activities of insurgent groups, circulation of FICN, and institutionalizing the mechanism for real-time exchange of security related information between the two countries. India and Nepal have decided to institutionalize the mechanism for regular meetings of the Border District Coordination Committees; and coordination and exchange of ground level/operational information between Sasashtra Seema Bal (SSB) and its counterpart police and security agencies in Nepal. India further offered its support and cooperation in matters relating to training and strengthening of Nepal Police, Armed Police Force, other officials, etc., and in the setting up of a Nepal Police Academy. But mere training is not enough. New Delhi must exert pressure on Kathmandu to put in place a fool-proof security protocol at the Kathmandu International Airport to detect fake currency couriers and consignments. Customs and Immigration staff at the airport must be familiarized with profiles and photos of fake currency racketeers and underworld gang members. Such a database meticulously prepared by Indian security and intelligence agencies could help appropriately trained Nepali security officials detect fake currency operatives. Besides, India should offer to train Nepalese customs and immigration officials in identifying and keeping watch over frequent travellers to Dubai, Dhaka, Colombo and other neighbouring countries. New Delhi should also fund the installation of hi tech luggage scanners at the Kathmandu airport so that the baggage of passengers are thoroughly checked. Nepal has become the hub for fake Indian currency. But policy-makers and politicians in Kathmandu are hardly bothered. Besides, the Indian government, too, has not demonstrated any urgency to tackle the problem. But, if Pakistan succeeds-pushing thousands of crores of fake Indian currency into India from Nepal, as easily as it is doing now-this kind of financial terrorism will have serious implications for the Indian economy. Rate this article ancel Rating .5

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About the author

VK Shashikumar, recipient of 'Ramnath Goenka Award for Excellence in Journalism' More by the same Author Indian built Zaranj-Delaram Highway under Taliban Control Operation Nandigram: The Inside Story China-Pak spy web in Northeast Gaps in Maritime Security-III Gaps in Maritime Security-II MORE

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