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Counterfeit Currencies : Challenges to India’s Internal Security

Counterfeit Currencies : Challenges to India’s Internal Security

  • Fake/ Counterfeit currency poses a huge security related threats and socio­economic problems. Its impact on general crime on society is serious as more and more educated unemployed youth are attracted towards the counterfeit racket. The menace of Counterfeit currency therefore is also dubbed as ‘economic terrorism’ confronted by India.
  • Apparently, it is difficult to distinguish between fake and real currency as counterfeits are now printed with state of the art technology using security paper that is made available only to state actors.
  • This clearly indicates involvement of government agencies in the neighbourhood. Pumping fake currencies is one of the sub-conventional warfare strategies pursued by Pakistan against India, an attempt to subvert the Indian economy and to fund terror networks.
  • Fake Indian currency notes principally originate from Pakistan, but are smuggled through various routes, in different ways. The popular routes are via UAE, Nepal and Bangladesh. Fake notes from Dubai are transported through air with the help of bonafide passengers or couriers appointed for the purpose. Thailand, Malaysia, Myanmar and Sri Lanka are also used as transit points.                                                                          Counterfeit Currencies : Challenges to India’s Internal Security
  • International airports in Bangalore, Chennai, Calicut, Cochin, Hyderabad, Mangalore, Mumbai and New Delhi are identified as main landing points of counterfeits from abroad. Porous and weak land borders respectively with Nepal and Bangladesh are utilised by organised gangs to smuggle counterfeits into India.
  • Fake currency is also sent by land route through infiltrators from Pakistan to India. Through the Bangladesh border as well, fake Indian currency, is being pumped into India via West Bengal. It was being funnelled via Delhi to terror groups like Hizbul Mujahideen.                            Counterfeit Currencies : Challenges to India’s Internal Security
  • Recently, National Investigation Agency (NIA) has established a clear link between Pakistan and Jammu and Kashmir-based terror outfits pooling their resources to circulate fake Indian currency and using it to fund jihadi activities in India. In a case related to smuggling of counterfeit currency, the NIA’s probe has revealed the role of Hizbul Mujahideen, which operates from J&K, in circulating fake currency.                                        Counterfeit Currencies : Challenges to India’s Internal Security
  • Fake Indian currency is being used being used by terrorist organisations to damage the economy of India and finance terrorist activities of their cadre operating in India.
  • As per Reserve Bank of India study on counterfeit notes, it has been observed that such notes have also begun to surface abroad, keeping pace with the convertible currencies.
  • The study estimates that seizures of Indian counterfeit currency in the Swiss system for the last ten years have risen fast. From hardly one or two pieces in 2001, the number of notes seized was 1,144 in 2011. The comparable seizure for Swiss francs is 3,702 and of US dollars, 2,228.
  • The study also suggests there could be about 3.9 lakh pieces of counterfeit notes, on an average, floating in the system.


Internal security

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