Hawala transactions are big in Bangalore, amounting to a whopping Rs 300 crore per month. The city is also the transit point for such transactions in the state and Kerala. The seizure of Rs 1.2 crore by officials of the directorate of enforcement (ED) on Wednesday was yet another indicator of this thriving racket. The arrest of two persons in this connection — Ratan Das, a resident of Banashankari, and Mohammed, a conduit from Kerala — revealed that Karnataka and Kerala share a good network. There are over 50 hawala operators in the city and well-oiled networks are at work in Bangalore, Mangalore and other coastal areas. They transact money in many countries across the globe, with hotspots being Dubai, Singapore and Hong Kong. They service businessmen, the rich (with black money), terrorists and others for a commission of 1-3% of the total amount to be delivered. Investigations have also revealed that these suspects are part of a bigger racket that operates in countries like Singapore, Dubai, the UK, Australia and Hong Kong.
Earlier incidents this year — the seizure of Rs 37 lakh from a man in Puttur about three months ago and Rs 1.4 crore from a person going to Kerala two months ago — prove the existence of a good network. "The money is carried from Bangalore to other centres and Kerala, mostly by road and in public buses," officials said.
Underworld dons operating in and outside the country heavily depend on this mode of money transfer. Also, the hawala channel is being used by PakistanÂ’s ISI to pump in huge amounts of "untraceable" money, mostly through Nepal and West Asia to foment terrorism and criminal activities in India. Suspected Al-Badr activists, Mohammed Fahad and Mohammed Ali Hussain, who were arrested in Mysore, and seven Lashkar-e-Taiba activists, arrested by Bangalore city police probing the IISc attack, are under the ED scanner. Officers are probing their links with jihadi groups operating in Pakistan, Saudi Arabia and Jammu and Kashmir. Fahad had sent money through hawala transactions to Al-Badr cadre in J&K.
The ED, which enforces Foreign Exchange Management Act, 1999, and Prevention of Money Laundering Act, 2002, is responsible for checking this activity. As per the existing law, hawala operation is not a cognizable offence in India and investigators cannot arrest suspects. As there is barely any documentation and "actual" transfer of money involved in the entire process, it barely leave any trail for enforcement agencies. In Karnataka, the ED has an office in Bangalore headed by an officer of the rank of deputy director. Along with him, there are only two assistant directors, three enforcement officers and six assistant enforcement officers. As this activity needs a thorough and close vigil, the detection rate is poor.