Intelligence told to study note ban impact

New Delhi: Central intelligence agencies, including the Intelligence Bureau and National Investigation Agency (NIA), have been asked to closely monitor the impact of demonetisation of Rs 500 and Rs 1,000 currency notes on terror funding as well as circulation of fake Indian currency notes (FICN), particularly by Pakistan’s Inter Services Intelligence (ISI).

Minister of state for finance Arjun Ram Meghwal had recently informed the Parliament that fake currency worth nearly Rs 400 crore was circulating in the economy though, according to intelligence sources, unofficially the figure could run into thousands of crores.

Top intelligence sources said the demonetisation move will have significant impact both on terror funding and even circulation of fake currency notes in the “short to medium term”. “It will take quite sometime for ISI or terror operatives like Dawood Ibrahim, who are actively involved in pumping fake currency into the economy, to copy the new Rs 500 and Rs 2,000 currency notes that are being introduced with enhanced safety features. Printing of fake smaller denominations has logistical problems so we feel the ISI will not go in for that,’’ a senior intelligence official said.

There is a view within the security establishment that by the time ISI develops the expertise to develop the new Indian currency notes our intelligence agencies would be able to crackdown and squeeze most of the channels for terror funding.

Intelligence agencies, sources added, are also closely monitoring the situation to ensure that the existing currency in the denomination of Rs 500 and Rs 1,000 is not pumped into the economy as these can be deposited with banks till December 30 this year.

Most of the fake currency comes into the country through the Nepal and Bangladesh route so extra vigil would be maintained on these two circuits, sources added. The hawala network is also being monitored.