Bihar – Terai land where fake notes don’t have borders

[This is where FICN are said to be moving in unaccounted crores from Nepali land to Indian business. This where the Indian intelligence claims, the Pakistani ISI has launched its operations to destabilize the Indian economy and fund “terrorism” on Indian soil.

We at “southasiaspeaks” have been consistently stressing that no single SA government would ever be able to eliminate such acts of “terror” or conduct counter-terrorism work all by itself and all attempts in controlling or eliminating “terrorism” are based on militaristic approaches. All of it, by their very logic of using force to eliminate “force” leads to militarizing of the society and erodes democratic life.

We at “southasiaspeaks” have thus been calling for people’s democratic interventions in opposing “terror” from both sides of the conflict. We thus reproduce the following article in its heavily abridged form that first appeared under the title Nepal; Export of fake currency” in the “Indian Defense Review Online to show how porous the borders are, that drag countries into complex conflicts.]

At most places along the 751 km Bihar-Terai contiguous no-man’s land on the India-Nepal border are dirt tracks. Solitary signpost marks the international boundary here. On one side is Bihar, on the other Nepal’s Terai region. The border is largely unmarked, unguarded and highly porous, the people who live in these parts desperately poor. Cross-border 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 Nepal’s 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. Pakistan’s Inter Services Intelligence (ISI) 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 India’s legitimate trade with Nepal is conducted.

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. 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 that’s 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.

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 Embassy’s 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 Ibrahim’s D-Company. “Certainly there are some nations and agencies behind this operation. A common person can’t identify what is fake and what is real. I can’t 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.

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.

Nepal’s 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 Pakistan’s ISI and gangster Dawood Ibrahim’s ‘D’ Company, Kathmandu is a crucial base in the financial terror campaign against India, and Kathmandu’s 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.

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 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. One is through Beherwa village on the Nepal border. India’s National Security Advisor MK Narayanan acknowledges the in-flow of fake currency from Nepal to India. “It’s 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.

He has also 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?

Pakistan’s ISI has roped in a very influential person to organize and operate the fake currency network. Reliable and senior Indian intelligence officers and Nepalese law enforcement officials and several politicians, too, confirm that Ansari is ISI and D Company’s 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 Gyanendra’s son, Paras, who has currently taken refuge in Singapore.

In Kathmandu, it’s 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 he’s talking about. His main political rival in the election to Nepal’s 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 don’t even deny allegations that they are involved in the racket. Ashok Temani, Vice-President of the Birganj Chambers of Commerce and Industry, admits that Nepal’s 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.

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.

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 India-Nepal 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.

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.

By V.K. Shashikumar

Issue: Vol. 23.4 ON THE SPOT REPORT

Indian Defense Review Online February 5th, 2009.

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