Sanchita Bhattacharya
Research Associate, Institute for Conflict Managemen
Islamist terror outfits operating on the Indian soil, aided and abetted by Pakistan’s external intelligence agency, the Inter Services Intelligence (ISI), have adopted various ways to fill their coffers. Prominent avenues of terrorist finance include the Banking sector, extortion, hawala (illegal money transfers), funding from various Non-Governmental Organisations (NGO), money generated through Narcotics, rampant circulation of Fake Indian Currency Notes (FICN) printed in Government Security Presses in Pakistan, as well as direct funding from the ISI.
In one of the more disturbing trends, a July 21, 2014, news report indicated that Pakistan based terror groups were increasingly targeting the Indian Banking sector. An alert from the Research and Analysis Wing (R&AW, India's external intelligence agency) noted that, “349 bank accounts are being used/operated by Indian associates for facilitating Pakistan-based groups running fake lottery rackets.” The country-wide network operated by Indian associates of Pakistani terrorist formations included at least 133 bank accounts in the State Bank of India (SBI), 33 in ICICI bank, 18 in Punjab National Bank (PNB); and another 26 accounts in Bank of Baroda, Oriental Bank of Commerce, Union Bank of India, Central Bank of India and the United Commercial Bank of India (bank wise numbers not available). Details of another 139 such accounts are being scrutinized, but are not publicly available. 99 users of Indian telephone numbers who are the local collaborators of the Pakistani groups “are under watch”, the note added.
Further, apprehensive of terrorists using the capital market to fund themselves, market regulator Securities and Exchange Board of India (SEBI), on March 12, 2014, tightened norms aimed at countering money laundering and terror financing through the capital markets and asked market entities to conduct detailed risk assessment of their clients, including those linked to countries facing international sanctions. There have been several reports in the past indicating that Pakistan-backed Islamist terrorists have been playing the stock market to augment their revenues.
Bank robberies have also become a significant source of funding. Investigations by the National Investigation Agency (NIA) into the October 27, 2013, Patna bomb blasts, in which eight persons were killed, have exposed the manner in which Indian Mujahideen (IM) has been utilizing bank robberies to fund its activities. An unnamed investigator disclosed, "Robberies and bank dacoities were being carried out to generate funds." Further, Abu Faisal aka Doctor, a prominent IM cadre and suspected mastermind of the December 23, 2013, Khandwa, Madhya Pradesh (MP), jailbreak incident, reportedly revealed that five bank robberies across MP in 2009-2010, as well as the INR 25 million in gold looted in Bhopal on August 23, 2010, were executed to raise funds for terrorist attacks. An unnamed Police officer disclosed, "In 2009, Faisal's group entered the Narmada Rural Bank [in Dewas] with firearms and robbed it. Later, they targeted other banks in Dewas and Itarsi. This group had also robbed 10 kilograms of gold from a gold finance company."
Investigations by Indian security agencies have also revealed that IM operative Mirza Shadab Baig had planned to set up an extortion cell, Maal-e-Ghanimat (Spoils of War), in Dubai for jihad (religious or holy war). Baig, who had been made in charge of the ‘project’ and was the point-person to collect the money, and his associates had procured several Dubai SIM cards which were to be used for making extortion calls. In his statement to the NIA, arrested IM operative Asadullah Akhtar akaHaddi disclosed that he was in talks with Baig to identify a hawala operator in Dubai and the Middle East, so that the money generated from extortion could be routed to India. The extortion cell was to target people in the Gulf. In addition, they were also engaged in efforts to extort money in Indian cities, including Pune (Maharashtra) and Kolkata (West Bengal).
Hawala, of course, continues to haunt the agencies involved in checking the flow of funds to terrorist groups. Ibrahim "Tiger" Memon, one of the main accused in the 1993 Mumbai (Maharashtra) serial blasts case, has long been tasked with transferring money through hawala channels, to India through Delhi, and not the usual Mumbai route, to target the Capital. Significantly, arrested IM 'India operations chief' Yasin Bhatkal aka Mohammed Ahmed Sidibapa aka Imran aka Shahrukh told investigators that he collected hawala money sent from Dubai or Sharjah by another IM member Hafeef Bhatkali during the November 26, 2008 (26/11) terror attacks in Mumbai. "At the time of 26/11, I was in Mumbai to collect INR 400,000 in cash sent by Hafeef. The hawala delivery boy handed over the money to me near a mosque in Pydhonie,” Bhtakal claimed. He added, further, "Hafeef Bhatkali, a computer engineer who was earlier based in Dubai, is now in Pakistan. Riyaz is in touch with him. Hafeef finances the IM." Hafeef has close links with Dawood Ibrahim's D-companyand runs hawala rackets in Mumbai and other places in India.
Evidence of a growing nexus between terror funding and non-governmental organisations (NGOs) is also accumulating. The Director of the Financial Intelligence Unit (FIU), N.N. Pandey, had asserted in November 2013 that the NGOs are the biggest source of funding of terrorist activities in India. Indeed, in March 2014, the Union Ministry of Home Affairs (UMHA) expressed concern that several NGOs in the country were potentially involved in terror financing and money laundering, and argued that it was time that self-regulatory steps were initiated by the NGO sector. Between 1993 and 2012, the number of registered associations (NGOs) rose from 15,039 to over 41,844, but through all these years only 54 to 64 per cent of these organisations filed details of foreign remittances received, UMHA disclosed. Current estimates suggest that there are nearly 85,000 NGOs in the country, of which 68,000 are registered with the Union Government to collect foreign funds. On paper, these NGOs claim to be working for a cause or as religious charities, but some of these are fronts to receive money either for terror or laundering. It has also been reported that there are at least 40 'charitable organizations' in Saudi Arabia whose primary function is to raise money for funding extremism and terrorism in India.
The ‘narcotics trade’ is another major concern. The latest group to join the India-centric terrorist web is the infamous Boko Haram of Nigeria. Reports indicate that the organisation has started to infiltrate the country with the help of drug-peddlers. According to sources, “They came on our radar after intelligence inputs indicated that Dawood Ibrahim’s younger brother Anees Ibrahim made several trips to Lagos last year [2013] and subsequently met an al-Qaeda 'commander' close to Boko Haram’s leader Abubakar Shekau. D-gang’s proximity with the two outfits indicates that militants are now riding on Dawood’s well-oiled network in India, Africa and South America to raise terror funds though drug trafficking.” Earlier, in September 2013, the NIA revealed that IM was also in touch with some drug syndicates in Chapora in Goa to raise funds. IM operatives helped in ferrying drugs to earn a share of the profits. Yasin Bhatkal disclosed that forging such alliances was essential for the IM, as there was a perpetual shortage of money to fund their terror plans.
Meanwhile, the ISI continues to pump increasing volumes of FICN into India and its neighbourhood in its campaign to provide finances for Islamist terrorists, and to destabilize the Indian Economy. According to a July 2014 report quoting the Intelligence Bureau, Sri Lanka and Maldives have been named two new transit destinations for FICN, with Chennai in Tamil Nadu as the point of arrival. An unnamed IB official stated, "Until now, FICN was known to come from Bangladesh and Nepal. The addition of two more neighbours to this list is rather worrying". Moreover, the ISI-run mafia engaged in production of FICN has altered patterns of circulation, increasingly emphasizing lower denomination notes, INR 500 and below, as compared to an overwhelming flow of INR 1,000 notes in the past. According to a report by the Central Economic Intelligence Bureau (CEIB), "Pakistani operators based in Nepal, Bangladesh, Malaysia and Thailand act as recipients of FICN from Pakistan as well as conduits to the distribution channels in India through air and land border."
There is substantial evidence of ISI directly funding terrorist outfits as well. While the funding trail of the 26/11 attacks has established ISI’s direct link, an intercepts from Pakistan by Indian intelligence agencies in March 2014 revealed that ISI gave about INR 26 million to IM operative Riyaz Bhatkal over the past three years for anti-India operations. Riyaz Bhatkal, based in Karachi, the provincial capital of Sindh, had sent funds to Yasin Bhatkal, Assadullah Akhtar, Tehsin Akhtar aka Monu, Zia-ur-Rehman aka Waqas, Shaquib (all arrested now) and others through Western Union money transfer and hawala dealers, sources disclosed, adding, "He used to send Rs 1 lakh to Rs 2 lakh depending on the demand but he had received a huge chunk of money from ISI for operations." Further, sources indicated, expenses for arming, training and maintaining cadres of various anti-India terrorist formations in camps in Pakistan occupied Kashmir (PoK) and other parts of Pakistan, were provided separately from funding for operations.
The Government has taken several measures, including constituting a Terror Funding and Fake Currency Cell (TFFC) in NIA in 2010 to focus on investigation into such cases. According to a June 2014 report, the new Government at the Centre is set to crack down on terror financing from across the border, recognizing this as one of the key steps towards beefing up India's internal security mechanisms. India has had its first detailed discussion in multi-lateral fora over terror-financing, and has sought cooperation of member countries to crack the financial network and fund-raising activities of Pakistan-based terrorist outfits and individual terrorists associated with these organisations. A delegation of the UMHA visited Russia from June 17-20, 2014, to attend the Eurasian Group (EAG) on Combating Money Laundering and Financing of Terrorism 20th Plenary Meeting. Meetings of the Working Groups also took place in Moscow to discuss the issue of terror-funding, with other member countries, including Belarus, Russia, China, Uzbekistan, Turkmenistan, Kazakhstan, Kyrgystan, Tajikistan and India. Currently, EAG is headed by K. P. Krishnan, India’s Additional Secretary, Ministry of Finance.
Islamabad’s unwavering support to terrorism and efforts to promote every possible form of instability within India have easily neutralized the limited gains of every past Indian initiative in this regard. Even as New Delhi struggles to contain the problem, the terrorists and their sponsors continue to expand and exploit new avenues of finance as well as routes and devices for their transfer to terrorists operating on Indian soil. International institutions and instruments have had little or no impact on this expanding network, and it remains to be seen how India is able to thwart the Pakistani design in future.
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