$700 million sent out of India through ‘legal hawala’
In the three cases under investigation, a total of $700 million (about Rs 4,400 crore) was sent out of the country, mainly to trading hubs like Dubai and Hong Kong, in the last six months.
RELATED
MUMBAI: The Enforcement Directorate (ED) recently seized Rs 83 lakh from a bank locker in south Mumbai. It is one of three cases the agency is investigating for suspected hawala-type transactions using the country's banking system. It believes that money running into thousands of crores is illegally sent abroad either as advance remittance for import of goods or by using forged import documents submitted to banks. As a result, the country suffers substantial loss of foreign currency.
In the three cases under investigation, a total of $700 million (about Rs 4,400 crore) was sent out of the country, mainly to trading hubs like Dubai and Hong Kong, in the last six months. The ED suspects the actual amount could be three times that detected.
A source said the accused took advantage of lacuna in the banking system to commit the fraud and there is no strong law to deal with the matter. Calling it a sophisticated hawala-like operation, he said money, most often obtained illegally, is being sent abroad through normal banking channels.
READ ALSO:
Drug-hawala ring busted in 4-nation raid
Siliguri scam took hawala route
He said fake companies are registered and accounts opened in leading banks and co-operative banks. Cash is first deposited in the co-operative banks and transferred from account to account several times to obscure its source. After it reaches a big bank, of course, through an online transaction, payments are made towards advance remittances for imports. Also, fake import documents are produced. The source said it is obvious that the racket cannot be carried out without the connivance of some bank officials. "Without their involvement, such an elaborate fraud cannot be carried out."
READ ALSO: ED files second complaint in hawala scam against 10
He said the money is received abroad by the racketeers' foreign partners, who withdraw the sums in foreign currency. "Thus, without importing anything, we are making payments in dollars. This is a loss for the country, a loss for India's banks," said the source.
READ ALSO: CBI alleges suspended Syndicate Bank CMD got bribe through hawala
He said that the registered companies vanish after a certain number of transactions are made and the perpetrators establish new fake companies.
In the three cases under investigation, a total of $700 million (about Rs 4,400 crore) was sent out of the country, mainly to trading hubs like Dubai and Hong Kong, in the last six months. The ED suspects the actual amount could be three times that detected.
A source said the accused took advantage of lacuna in the banking system to commit the fraud and there is no strong law to deal with the matter. Calling it a sophisticated hawala-like operation, he said money, most often obtained illegally, is being sent abroad through normal banking channels.
READ ALSO:
Drug-hawala ring busted in 4-nation raid
Siliguri scam took hawala route
He said fake companies are registered and accounts opened in leading banks and co-operative banks. Cash is first deposited in the co-operative banks and transferred from account to account several times to obscure its source. After it reaches a big bank, of course, through an online transaction, payments are made towards advance remittances for imports. Also, fake import documents are produced. The source said it is obvious that the racket cannot be carried out without the connivance of some bank officials. "Without their involvement, such an elaborate fraud cannot be carried out."
READ ALSO: ED files second complaint in hawala scam against 10
He said the money is received abroad by the racketeers' foreign partners, who withdraw the sums in foreign currency. "Thus, without importing anything, we are making payments in dollars. This is a loss for the country, a loss for India's banks," said the source.
READ ALSO: CBI alleges suspended Syndicate Bank CMD got bribe through hawala
He said that the registered companies vanish after a certain number of transactions are made and the perpetrators establish new fake companies.
Stay updated on the go with Times of India News App. Click here to download it for your device.
Promoted Stories
- U.S Presidents Ranked From Worst to Best RantPolitical
- Militaries That Could Destroy the WorldRantPolitical
- This Is the Future of Cities Microsoft
More from The Times of India
- India to develop two islands in Indian Ocean 11 Mar 2015
- Actresses who will never be friends 10 Mar 2015
Subscribe to Top News Newsletter
Get updates on the most important happening of the day
ALSO ON TOI
Recent Messages (42)
thank u namo for all that u do.
Many a time we are tempted to think that we do not have enough laws. But sorry, the true problem we have is ineffective enforcement and awareness issues with enforcement agencies.
Yet there are people who avoid taxes and now this hawala. Rules are for only those that follow them?
If this hawala is illegal, then, still shame on our banking system for not catching it. Why is it that everyone in this country wants to rob it or cheat it?!