The Intelligence Bureau (IB) has claimed that Hawala transactions have dropped by as much as 80 per cent in major cities such as Delhi, Jaipur, Ahmedabad and Mumbai as operatives have gone underground after government’s demonetisation move.
In his address on Tuesday Prime Minister Narendra Modi in an ‘emergency’ like announcement declared that Rs 500 and Rs 1000 would be no longer legal lenders.
“In the last three days, there has been virtually no hawala transactions between Gulf countries and the Kashmir Valley,” said the IB in its report submitted to the Union home ministry. The report added, “Hawala operators are fearing a major crackdown on their operations by security forces. Operators do not want to risk accepting the spiked notes. Surveys and searches by the Income-Tax department have also had an impact.”
Hawala transactions are illegal chain of money transfers that operates on trust-based human networks across the country. Cash delivered in one place can be made available elsewhere within minutes bypassing banking channels and leaving no paper trail.
The intelligent officials have claimed that the Hawala transactions have been hit badly since Tuesday’s announcement. It is estimated that the size of the Hawala market in India is close Rs 2 lakh crore. Money laundered through hawala channels is used to finance terror, drugs cartels, besides bribery and circulation of fake currency.
The home ministry had asked central agencies such as the IB and the National Investigation Agency (NIA) to monitor the impact of the government demonetisation move. The agencies have identified certain suspicious accounts in which hawala money was deposited through a Gulf route.
In a survey conducted earlier by IB said that 60 per cent of 45-60 year-old citizens were critical of PM’s demonetisation move. The results of this snap poll were collated and submitted to the Prime Minister’s Office on Wednesday night, a day before PM Modi left on his three-day visit to Japan.