Pakistan’s ISI has diversified printing of fake Indian currency notes (FICN) to Malaysia and Singapore in its bid to deny involvement in the illegal trade.

The Pakistani agency is also using the fake currency to fund Naxal outfits and insurgent groups in the North-East.

Earlier, FICN was printed only in lahore and Indian Intelligence agencies have gathered details of the location, the printing facility and the ISI and Pakistan Army officials running the show in lahore.

India has also furnished dossiers along with satellite imageries of the site in lahore to the Pakistani Government.

The Pakistani agency, in association with global terrorist Dawood Ibrahim, has set up FICN printing facilities in Malaysia and Singapore since these two countries, besides UAE and Nepal, are the major routes for movement of FICN.

Dawood, according to Intelligence agencies, is involved in the FICN distribution chain in a major way. Movement of FICN was earlier channeled through various indirect routes encompassing several countries and through different modes of transport.

Top Intelligence sources said the FICN printed in Singapore has high quality security features, including the security thread and watermark that can only be detected by sophisticated machines. Realising the magnitude of the problem, the Centre is examining proposals to incorporate seven more security features in the currency notes.

The revelations have come after sustained interrogation of terrorists Abdul Karim Tunda and Yasin Bhatkal. Tunda and Bhatkal have also revealed that FICN is being widely used by the ISI to fund insurgent groups in the North-East and Maoists.

The ISI has also developed an extensive network along the Indo-Nepal border with an estimated turnover of Rs200-crore in the region. This, besides the porous Indo-Nepal border, is also used to ship fake currency to the tune of about Rs2,000-crore to metropolitan cities like Kolkata and Mumbai and other places across the country.

The fakes are widely in circulation from Banke to Birta Mod in Nepal and Bahraich in UP to Siliguri in West Bengal on the Indian side.

Kathmandu has become a major hub of the FICN distribution network. The ISI’s hold in Kathmandu has been steadily growing from 2005 onwards, even as the network of sources and agents of Indian covert agencies has diminished due to a variety of reasons, sources admitted.

Indian agencies wielded considerable clout between 2001 and 2004 and gave a tough time to Pakistani agents in the Himalayan capital, they added.   

“Apart from implications for the national economy, FICN is also a widely-prevalent mode of terror financing. The highly-evolved networks in place for the movement of FICN and Hawala, act as infrastructure for gunrunning, transportation of explosives, provision of hideouts and communication channels for terrorists,” an Intelligence official said.

The fakes reach Kathmandu via diplomatic cargo for the Pakistani mission and are distributed by undercover ISI agents to places like Bara, Birganj, Bhairhawa, Dhanusha, Kakadbhitha, Kanchanpur and Biratnagar. The fake currency is also brought in from Thailand to Kathmandu.

Nepal police’s report on interrogation of Tunda has a detailed district-wise list of the people involved in the FICN “trade” on both sides of the border.

Nepalese politicians including Ramchandra Pyasi, Sanjay Saha alias Sanjay Takla and Rameshwar Rai Yadav also figure in the list. Jainuddin Ansari of National Medical College, Birgunj (Nepal) also finds a mention in the list.

Pyasi, Takla and Yadav have been blacklisted by the Indian Embassy there, the sources said.