Malda, India's fake currency capital, is feeling the demonetisation pinch

The government’s announcement on Tuesday night to demonetise Rs 500 and Rs 1,000 notes is a massive blow to Kaliachawk. This border town in the West Bengal district of Malda is the ground zero of the fake currency network in India, with the counterfeit notes making their way in from Bangladesh through the border. Many residents of the town make their living from this illegal trade, mostly working as couriers. And all fake Indian currency notes, known as FICN, seized across the country are more often than not traced back to Kaliachawk.

In the days since the big currency notes were rendered illegal tender, the flourishing undercover business of counterfeit cash running into crores has come to a screeching halt overnight, unsettling hundreds of people. The border has fallen silent. There have even been rumours of currency notes being dumped in rivers and fields.

The Border Security Force, which dedicates a large amount of its time to keeping a watch on this illegal trade, is a relieved lot. But they say the business will be up and running again.

“We are looking at a time frame of one month to three months before we make the first seizure of a fresh consignment of fake Indian currency, this time most likely Rs 100 notes,” said a senior BSF officer who did not want to be identified. “That’s our feedback from across the border in Bangladesh.”

The officer said inputs suggested the government’s move to clamp down on black money had hit big dealers in counterfeit currency in the neighbouring country and several thousand couriers on either side of the border. “But the duration of a FICN-free market place is going to be short-lived,” he warned.

But for now, the border force will relish this lull. “The overall and immediate impact of the currency ban has been stunning all along the India-Bangladesh border,” said special DG RP Singh. “The Central government’s move has come as a big relief to the force engaged in these areas and particularly in districts like Malda in West Bengal.”

The BSF covers 4,096 km of the border with Bangladesh in the five states of West Bengal, Assam, Meghalaya, Mizoram and Tripura.

The illegal trade

Malda sector, in BSF parlance, has a border of 223 km with Bangladesh, of which about 150 km is fenced while the rest is mostly riverine, open border. The shifting sands of the Ganga create charland – raised land as a result of silt deposition – on this non-demarcated border during the winter months, while its gushing waters wipe away the border in the monsoon. The border is said to have 58 outposts and a 2,500-strong contingent of the BSF to man these.

According to security forces, the trans-border trade in fake currency is done mostly along the fenced border. Picking spots where vigil is slack, couriers from Bangladesh toss up the consignments in plastic packets for their counterparts on the Indian side to pick up.

“The movement is done in chains,” explained a security official who did not want to be identified. “From the point of origin of the consignment in Bangladesh to the destination in Kaliachawk, there would be no less than 20 to 25 couriers in each chain. Each person in the chain normally covers a distance of 100 meters to hand over the consignment to the next one in the chain. It is an intricate network and very difficult to trap and dismantle.”

The fake notes then make their way across the country in various ways, the most prolific method being through syndicates dealing with the construction business in states like Pune, Maharastra, Delhi, Chennai, Bengaluru and Kerala. Construction workers from Malda and Murshidabad, another district in West Bengal, have often been used as couriers of fake currency to other states.

In April 2014, the Pune police arrested a resident of Malda with fake Indian currency valued at Rs 1,96,000, which had been sourced from Kaliachawk. In December 2015, the Special Operations Group of the Mumbai crime branch arrested two brothers from Murshidabad with fake notes worth Rs 8,00,000. The police claimed the arrested men had admitted they had delivered around Rs 1.5 crore in fake currency to Delhi, Gujarat and Maharashtra in the last two years. In 2014 and 2015, 150 cases of fake currency seizures across the country had their origin in Kaliachawk.

Such seizures – often said to be the tip of the iceberg – registered a sharp spike in these two years. According to official statistics, fake currency seized in the South Bengal Frontier, including Malda, totalled Rs 3.6 lakhs in 2012, Rs 80.9 lakhs in 2013, Rs 1.7 crores in 2014, Rs 2.6 crores in 2015 and Rs 1.3 crores this year till October. Officials said there had been a slump in the trade since the terror attack on a café in Dhaka in July.

According to a BSF officer who has done research on the circulation of fake Indian currency in the area, the Dhaka terror attack was a turning point for the illegal border trade. “The illicit border trade has been somewhat volatile since July after the terror attack, which called for better coordination between the Bangladesh Border Guards and the BSF,” he said. “Surveillance by the Bangladesh Rapid Action Battalion and Border Guards on their side and by the BSF and the National Investigation Agency on the Indian side was stepped up.”

All quiet on the border

The slump can be seen all along the border in Malda.

“I made a round of some of the border outposts on Wednesday morning,” said a Border Security Force officer who deals mainly with fake currency matters. “A vast majority of the youth on the border seem to have lapsed into wait-and-watch mode with anxiety written large on the faces of these syndicate members dealing in FICN. They are familiar faces. But suddenly, there are no takers and no suppliers as there is no demand. There was least activity on the border. An all pervading lull greeted me as I travelled through the winding roads.”

The officer, speaking on condition of anonymity, said the force had received a tip-off about a consignment from Bangladesh having landed in Kaliachawk almost coinciding with the demonetisation announcement on Tuesday night.

“Earlier, we would have rushed to the spot, lest it find passage elsewhere,” he said. “But this time we just did not respond. Who will touch this currency now? They are as good as waste paper.”

He added, “I checked with my sources across the border in Bangladesh and the same despondency seems to have struck dealers on the other side.”

Santosh Das (name changed) lives in Churiantapur, considered one of the most porous points on the border as far as the illicit currency trade is concerned, and witnessed the sudden halt in the business. “The scene has changed radically overnight,” he said. “The mafia groups who would be running up and down the border roads in their motorbikes are suddenly missing. It’s been a bolt from the blue for them. And there have been rumours about fake currency notes being found in abandoned fields and in adjoining rivers.”

Swadhin Sarkar, the Bharatiya Janata Party MLA from Baishnavnagar in Malda, said, “I do not know about fake currency floating in the river but in Doltola area of Kaliachawk some fake currency was found abandoned in a field.” He added, “Local kids took those away and the police were not informed.”

Sarkar also said the lull in the counterfeit currency trade came with other risks. “We are worried about the mafia groups who dealt in currency and what their next step will be,” he said. “Many fear that criminal activities like robbery, snatchings and assault might increase.”

But for the Border Security Force, the lull gives them a chance to deal with other clandestine business in the area.

“Our main energy was diverted towards dealing with the fake currency network,” said a BSF commander who did not want to be identified. “The fake currency trade was driving other clandestine operations like cow smuggling and trade in opium and illegal arms. Local contacts say the illegal trade is concentrated in villages like Churiantapur, Char Sujapur and Pardeonapur on the Indian side and Thutupara, Kusumpur and Ghughudanga on the Bangladesh side. We are reassessing our priority areas now with the focus on fake currency totally eliminated.”

Another BSF official said the force would be keeping an eye on the border population involved in the fake currency trade as they may venture into other areas of smuggling, such as electronics, gold, mobile phones, cows, narcotics, arms and even essential commodities.

However, district police administration officials were sceptical about the halt in the illegal currency trade lasting too long. “It is just a matter of months before we hear about fake currency having landed in Kaliachawk in denominations of Rs 100 and also the new Rs 500 and Rs 2,000 notes,” said one official.

The officials added that Bangladesh wasn’t the only source of fake currency. Police investigations had found that large-scale manufacture of the notes may also be done in Pakistan and the consignments transported to Dubai or Nepal for entry into India, they said.