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How hawala money funds terror in India, abroad

May 14, 2010 16:55 IST

Investigators probing the failed Times Square bombing suspect that a hawala racket was used to fund the terror plot.

Hawala is the most common source of funds for terror operations and the global underground racket amounts to a whopping Rs 8,000 crore. Sources in the Intelligence Bureau's Financial Intelligence Unit say that Indian hawala operations account for Rs 2,000 crore.

Most hawala transactions that fund terror operations originate in Pakistan. India's most-wanted fugitive Dawood Ibrahim plays a key role in the hawala racket, funded by the arms and drugs syndicate run by his D-company. Ironically, counterfeit money is never used in hawala transactions, which are carried out through banks.

If the US administration traces the origin of the money, they will realise the role played by the Inter Services Intelligence in encouraging hawala transactions, say IB sources.

Ahmed Ashfaq, a Lashkar-e-Tayiba militant arrested recently, told investigators that the main operating hub for hawala transactions in India is at Chandini Chowk in New Delhi. The money generated in Pakistan is sent via infiltrators and pumped into Delhi from where it is picked up by cadres.

Riyadh is also another major hub for hawala transactions and an operator called Basheer takes care of the operations. His runs an outfit called the Muslim Defence Fund and he reports to the D-company. The MDF was set up by Dawood ten years ago, and the money for terror operations in India used to be routed via Riyadh. The hawala operations were moved to Delhi as the money was passing through too many hands.

The terrorist in charge of the mission, who has a code name, gets in touch with the hawala operator for the money.

In Shehzad's case, the funds were possibly supplied from Riyadh in US dollars. In hawala circles, this currency is known as hara. UK pound is called popleen, the Dutch Glider is God, Deutsche Mark is DM and the French Franc is FF.

Intelligence agencies have also found that apart from arms smuggling, hawala money is also generated by Dawood's other operations, including real estate business and opium smuggling.

Vicky Nanjappa