New Delhi, Nov 9: The decision to demonetise higher denomination currency notes of Rs 500 and Rs 1000 will help pull out Fake Indian Currency Notes (FICN), whose face value is pegged at around Rs 400 crore by security experts, from circulation.
The Narendra Modi government's action will definitely deal a severe blow to the FICN rackets operating out of Pakistan as production of currency notes of smaller denomination will have logistical issues considering the large volume that would be required to pump them into India, say security experts dealing with terror financing and counterfeit currencies.
Quoting from a study conducted by the Kolkata-based Indian Statistical Institute (ISI) and National Investigation Agency (NIA), the experts said the face value of FICN in circulation was found to be about Rs 400 crore which remained stagnant for the last four years.
According to the study, FICN of face value of Rs 70,000 crore was pumped in by Pakistani spy agency ISI and underworld gangs operating from outside India out of which only one-third could be detected by law enforcement agencies.
The remaining could be detected as and when those were deposited in the banks, they said, adding at an average the figure had remained at Rs 400 crore.
Now, after the fresh measure, the experts feel the counterfeit currency notes of Rs 500 and Rs 1000 will either be destroyed by the racketeers or detected while being deposited in the banks. Around 80 per cent of the FICN was routed to India through Bangladesh.
The National Investigation Agency, India's anti-terror probe organisation has been engaging with its counterparts in Dhaka to crack down on gangs involved in the activity in that country, particularly at its airport and ports.
The other area that will be hit by the government's decision is the 'hawala channel' which was being extensively used by the ISI to finance terror networks. The hawala operators would generally stock Rs 1000 and Rs 500 denomination notes because these were easy to handle due to lesser volume.
To check the menace of counterfeiting of bank notes, the Finance and Home ministries, Reserve Bank, security and intelligence agencies of the Centre and states are working in tandem. An FICN Coordination Group (FCORD) is also functional in the Home Ministry to share the intelligence among different security agencies of states and the Centre.