Demonetization has hit terror funding

Prime Minister Narendra Modi’s surprise demonetization of high denomination has hit terror funding in three key theatres of Left wing extremism, the Northeast insurgency, and Pakistan- and POK-based terror outfits by sucking out a sizeable chunk from their parallel economy estimated at almost Rs 800 crore, Minister of State for Home Kiren Rijiju confirmed on Friday.

The Northeast insurgent groups and CPI (Maoist) are the worst hit, and stand to lose out on close to Rs 780 crore that they had amassed through extortion of government companies, mining corporate, businesses and private contractors. Pakistan- and POK-based terror outfits such as the Lashkar-e-Toiba, Jaish-e-Mohammed and Hizb-ul-Mujahedin and other smaller terror groups may also take a hit of close to Rs. 20 crore, intelligence agencies had also claimed.

The government is expected to reveal this information in Parliament during the demonetization debate to counter opposition parties’ protest against the move. 

Rijiju said the terror financing has got a decisive blow since November 8.

Applauding Prime Minister Narendra Modi’s move, Rijiju said demonetization has wiped out the Fake Indian Currency Notes (FICN) network, estimated to be worth Rs 400 crore.

“Since November 8, not a single instance of FICN smuggling has been reported from Pakistan, Nepal or Bangladesh border,” he said.

Some sources, however, said that these numbers are assumed estimates as agencies are not yet sure how much of that amount will find its way back into the coffers of terror and insurgent outfits. “Like mainstream black money hoarders, they are also trying to exchange their old currency into new. It all depends on how much our agencies and police are able to check that. I fear their finances would be hit about only 20% to 30%,” a senior official conceded. 

Naxalites in Gondia, Chandrapur and Gadhchiroli have also been reported to be involved in giving demonetised Rs 500 and Rs 1000 notes to villagers and coercing them to get them exchanged for the new notes, Maharashtra Police sources said. “We have been gathering ground level intelligence on Naxalites following the demonetisation of high denomination notes. During our monitoring we found that Naxalites are sending a few villagers from Naxal-hit Gondia, Chandrapur and Gadhchiroli with demonetised notes to the banks in order to exchange them,” said a senior Maharashtra Police officer, requesting anonymity.

The modus operandi came to light after the movements of a few suspected villagers came to the the notice of officers of the security establishment. “We tracked movements of these suspected villagers and learnt that they were carrying money handed over to them by the Naxals. Once this fact came to our notice, we beefed up monitoring the banks and post offices in the Naxal-affected areas. All efforts are being taken to ensure that Naxals do not succeed in getting demonetised notes exchanged,” the officer quoted earlier said. 

“The demonetisation has broken the backbone of Naxals to a great extent. With their current finances largely in demonetised notes, they will not be able to lure villagers or buy weapons,” he added.

On November 14, the Border Security Force (BSF) in Chhattisgarh seized unaccounted cash of more than Rs 5 lakh in Rs 1,000 and Rs 500 demonetised denominations from a person travelling in a bus. It is suspected that the money was for terror or Naxal funding and was being carried to be changed to new denominations. The BSF deployed in Kanker district of Chattisgarh had some inputs of shifting of such money to Maharashtra for changing intto new denominations. Police authorities of Kanker (Chattisgarh) and Gadhchiroli in Maharashtra were also informed about the seizure.