It was already expected that demonetisation would have severe impact on all those who involved in illegal activities such as drug-peddling, human trafficking, etc. But what happened to the hawala traders now is exceptional.
Reports says that only 3-5 percent of the trade by the operators in India, Pakistan & Dubai are now functioning.
The situation in Delhi, which is a hub of these agents seems to be even worse and they now closed their shops as both customers & cash are negligible following the 8th of November.
According to sources, gujarati traders working in the capital city are most affected & now run the risk of going bankrupt. Their usual custom was to shut down offices for Diwali & go back to Gujarat for 15-20 days. But this time around these traders haven’t even returned back to Delhi. Great volumes of cash that was kept with these people became useless when Prime Minister Modi made the announcement of demonetisation.
Such channels of laundering money are the lifeline of terrorists, drug dealers, & other criminals. With just 3-5 percent of the trade still intact, it is but obvious that terrorism & other mafia activities have suffered a huge blow.
According to investigation agencies these networks are attempting to revive their business by parking new currency in neighbouring countries. But the officials are tightening the screws especially near Bangladesh & ensuring that this is kept to a bare minimum.
When a reporter approached the hawala dealer as a client, asking for Rs 20 lakh in old currency to be sent to Mumbai,surprisingly the operator refused to change the scrapped notes. When asked if Rs 20 lakh in new currency can be transferred to Mumbai, the operator turned that down as well, saying only Rs 4 to 5 lakh can be transferred.
“The liquidity of the new currency is very less so the operator sitting on the other side might not have the same amount as the client is willing to send,” said another hawala dealer.
“But to survive, we are relying on the conversion of black money using agents and giving them 10 per cent commission.”
A broker who was ready to send hawala money from Delhi to Dubai said that he is taking extra commission for old currency transactions.
The trading is based on trust, has no records or paper trail and legal enforcement, is fast, flexible, non-bureaucratic, and charges low commission rate, but is illegal. There is never any physical transfer of money and the channel is always anonymous. The money enters the system in local currency and leaves as a foreign currency.
“If 1 lakh Dirham has to be received in Dubai then Rs 21.5 lakh (in old currency) can be deposited in Delhi or Rs 19.25 lakh in new currency,” he said.