Kerala which is called God's own Country also has this reputation of being the state with the highest hawala remittance in the country. Yesterday we explained to our readers the definition of hawala and its code. Today in the second part of this series we tell you the horrific state of affairs prevailing in Kerala and how it went on to become the hawala capital of the world. [Part 1: Tracing hawala money transactions in India]
Rs 23,000 crore hawala every year:
A report of the Home Ministry which is with oneindia.com states that there is an annual remittance of hawala money into Kerala which runs into around Rs 23,000 crore per year. This is a worrying statistic since Kerala incidentally is the state which has linked the Gulf with India as a result of which several terror groups have set up base here.
The reason why Kerala sees such a huge remittance of hawala money is because a large number of people from this state work in the Gulf and prefer this channel to remit their money.
The most worrying sign is that hawala money has also been used to fund terror activities in the country and most of the attacks have used this money which is being remitted into Kerala. The blasts at Delhi, Bangalore and Ahmedabad according to the National Investigating Agency have all had traces of hawala money pumped in through Kerala.
There are a large number of people from Kerala who work in the Gulf. Almost all of them rely very heavily on the hawala network to send money across to their relatives. While this is one part of the problem another issue that emerged was financing of terror modules as terrorists too used the same channel.
Over the years Kerala became the most preferred destination to channel hawala money. The agencies too found it extremely difficult to control this problem since the remittance was so huge and they were unable to differentiate between the money sent by terrorists and non-terrorists.
Highest number of hawala operatives:
Kerala after Delhi has the most number of hawala operatives or hawaladhars in the country. A rough estimate that has been drawn out by the agencies would suggest that there are 400 hawala operators in Kerala alone when compared to the 280 in Delhi. These operatives will channel money without even checking the antecedents of the person and this has led to the problem. Hawala operatives have a free run in Kerala for a large number of reasons.
The state government despite being warned has turned a blind eye as there are persons who are politically well connected behind this racket. Moreover with so much money coming in a large number of it has been used to bribe politicians as well.
An oxygen for terrorists:
An Intelligence Bureau report prepared along with the Kerala police suggests that today it is mainly terror groups which run this racket. Last year an investigation showed that 2000 calls were made from a jail in Kerala to the Gulf and each of these calls were regarding the remittance of hawala money. The problem for the agencies has doubled since terror operatives have come into play. In the year 2002 the annual remittance of hawala money into the state was at around Rs 703 crore and by 2013 the figure had almost gone up 20 times.
It has been found that several unemployed youth in Kerala were appointed as hawala operators. Statistics available suggest that these youth who were desperate for jobs were roped in for a salary on a daily wage basis. These persons earn anything between Rs 2000 to Rs 2500 per day depending on the nature of work. Hawala deals does not restrict itself to money alone. Earlier there used to be gold and silver that was moved through a similar transaction.
An officer with the Director of Revenue Intelligence informed oneindia that it has over the years become a very strong network. Most of the case that we investigated suggested that the network was the strongest in Kannur, Mallapuram and Palakkad.
In at least 60 per cent of the cases it was found that the money was being easily remitted and avoiding any sort of scrutiny since from Gulf the money would be sent in the name of religion. The money was being moved regularly and the note attached to it would normally suggest that it was money being sent for charity or religious contribution. Normally the local police turns a blind eye when it comes to such money as they feel that investigating money meant for religious purposes could vitiate the atmosphere.
The gold route:
A large part of the hawala remittance has also been in the form of Gold. This is yet another problematic area as it has been found that several persons involved in this have set up legitimate businesses in order to move gold through a hawala channel. You may stumble upon a travel agent or a hotelier and not even realize that his main business is hawala. They have a major set of clients who are usually businessmen and gold smiths.
These persons in particular benefit the most thanks to hawala as the gold which is moved into Kerala is sold at major profit since through this channel they avoid paying of any duty. During the wedding season this racket is the highest since there is a great demand for gold especially from the Gulf. At least 70 per cent of the remittance takes place during the wedding season.
[Next: How ISI blackmailed politicians to turn a blind eye]