Intelligence sources maintained that Kashmir has emerged as a prominent focus for hawala transactions, as extremist outfits in countries grouped under the Organization of Islamic Countries (OIC) send money to terrorist groups in the state. Intelligence agencies estimate that about 90-95 per cent of extremist funding comes through this channel, with Pakistan and Saudi Arabia the primary sources of these illegal flows.
Prime Minister Narendra Modi’s decision to demonetise Rs 1,000 and Rs 500 notes may be causing inconveniences to the people, but the move has eventually halted all terror operations, especially in parts of the Kashmir Valley where nearly Rs 3,000 crore of hawala money in circulation is of ‘no use’.
The masterstroke by the government will also lead to a major shift in the terror infrastructure management and change the character as well as nature of terror funding in the country.
Besides terror, the four-month-long unrest in the valley, erupted after the killing of self-styled HuM commander Burhan Wani by security forces in July, is also expected to be wiped out in the absence of cash inflow, security agencies believe.
Major chunk of the hawala money is delivered to separatist leaders and local politicians to fuel protestors. According to Intelligence estimates, Pakistan pumps in Rs 800-1,000 crore annually for the separatist groups alone in Jammu and Kashmir.
Pakistan pumps in Rs 800-1,000 crore annually for separatist groups in Jammu and Kashmir, according to Intelligence estimates. This is apart from Rs 300-500 crore that is funded to mainstream politicians and local terror groups such as Hizbul Mujahideen.
Thirty per cent of this fund is paid to the beneficiaries in US dollars in bank accounts abroad. Half of the 70 per cent funds is paid in original currency, and the remaining in fake Indian currency.
Intelligence officials said that lack of hawala money inflow will majorly hit activities of Maoists and other insurgent groups in the northeastern states. These groups create a corpus of Rs 2,000-3000 crore annually from extortion, and buy weapons and explosives to carry out operations. They will be also be hit hard as the stocked currency has become useless and availability of new high-value notes is not in abundance.
Intelligence sources maintained that Kashmir has emerged as a prominent focus for hawala transactions, as extremist outfits in countries grouped under the Organization of Islamic Countries (OIC) send money to terrorist groups in the state. Intelligence agencies estimate that about 90-95 per cent of extremist funding comes through this channel, with Pakistan and Saudi Arabia the primary sources of these illegal flows. Some traders of Punjab, Rajasthan, Delhi and Kolkata are hand in glove with Pakistan’s ISI operatives and play a key role in transferring hawala money to terror modules.
Between 2013 and 2016, 17 cases were registered and 37 persons were arrested in terror-funding cases in J&K, mostly in hawala and FICN cases.
An Army source said that ‘cash convoy’ of terror groups—militants infiltrating the border with huge amounts of fake currency to support operations—will no longer be available. So far, this year, over 90 infiltration attempts by militants have been reportedly successful. “Every infiltrated militants generally come with Rs 3-5 lakh of cash with high denomination to sustain,” said an officer.
While mainstream politicians with Pakistan leanings and separatist groups backed by Islamabad will not be able to either fuel unrest in J&K or malign India’s image abroad, terror sleeper cells created by the neighbouring country in the hinterland will not be able to indulge in insidious agenda due to deprivation of funds owing to the scrapping of Rs 500 and Rs 1,000 notes.
The level of terror conspiracy by Pakistan that used to be relatively simple in nature earlier is likely to become complex and multi-layered as its network of sympathisers and members of sleeper cells will be choked of funds as the number of higher denomination currency is currently limited in number. The end-user can be easily tracked down by the number series of the notes and bank branch of its origin. The agencies already maintain the list of suspects and criminals in different areas, a senior Intelligence official said.
“In this backdrop, ISI will be compelled to shift to the organised crime networks for logistic procurement and funding for terror activities. With currency of higher denomination being limited in circulation, Pakistani agencies and terror affiliates will now have to rely on gold for conversion to Indian rupees. However, rules relating to purchase and sale of gold have also been made difficult as the sellers are required give declaration that it belongs to him or her,” counter-terrorism expert Rituraj Mate said.
He added that Pakistan had created an elaborate but discreet network for logistics for terror activities and specific modules from a group of sleeper cells to execute terror such as bomb blasts. Both would disperse after playing their respective roles. This well-synchronised arrangement will now be shattered, and support from conventional criminal gangs and organised crime networks is likely to be sought by the ISI.
The demonetisation of the currency comes after a government crackdown on NGOs that were involved in terror funding, making the job of Pakistan-backed terror groups such as Lashkar-e-Taiba, Jaish-e-Mohammad and Hizbul Mujahideen and their affiliates such as Indian Mujahideen.
Courtesy: The New Indian Express