What not to bring when visiting Nepal

When I arrived in Nepal for my present assignment in October 2009, I carried several thousand rupees in 500 and 1000 denominations. Since I was travelling to the country after a nine year gap, I was completely unaware that Indian notes of those denominations have been banned and are illegal in the Himalayan nation.

It took some effort to find a Marwari businessman who agreed to change them to Nepali currency. Indian currency of lesser denominations is still accepted in Nepal, but the Reserve Bank of India is unlikely to lift the ban on high denomination Indian currency anytime soon.

Citing continued threat posed to the Indian economy, RBI Governor Dr D Subbarao told a group of visiting Nepali journalists in Mumbai last week that there is no reason to reverse the ban.

Nepal is one of the main routes through which Pakistan ‘exports’ fake Indian currency notes (FICN) especially those of higher denomination into India using the 1800-km-long open border between both nations. It is estimated nearly Rs 100 crore counterfeit Indian notes enter India via Nepal every month.

Pakistani nationals carrying FICN are arrested in Kathmandu with disturbing frequency. In a recent meeting with Nepal Rashtra Bank officials, RBI authorities discussed the need put in place joint measures to tackle the malaise. But there has been no change on the ground.

As per official estimates FICN worth US $ 2.2 billion were in circulation in India till last year. According to a recent article on South Asian Terrorism Portal (SATP), Pakistan’s Inter Services Intelligence is responsible for pumping FICN into India to serve the dual purpose of destabilizing the economy and also to fund terror.

The International Narcotics Control Strategy Report 2011 of the US State Department mentions about the problem of FICN and how these notes originating mostly from Pakistan are used to fund criminal networks and terrorists in India.

The SATP article mentions of a Central Bureau of Investigation report to the Indian finance ministry where it reiterated how Pakistan government’s printing presses in Quetta, Karachi, Lahore and Peshawar were being used to print FICN using sophisticated methods.

Nepal has been an important link in the FICN ‘business’ for some years now. In 2000, a month after the IC814 hijacking, a Pakistani embassy official in Kathmandu was thrown out of the country after he was caught transacting FICN. These days Pakistanis travelling to Nepal by air are used to transport the contraband.

According to intelligence inputs, once the FICN enters Nepal, Nepali agents with help of ISI officers posted in the Pakistan embassy transport it to the Indo-Nepal border where thousands of commoners (mostly women) acting as couriers are paid a small commission to take the counterfeit notes to India and hand them over to agents on the other side.

Lax security on both sides of the border and corrupt officials ensures that the transactions go without a glitch almost always.

The same method is used to transfer small arms across both sides.

In January last year, Yunus Ansari, a Nepali politician, his associate and two Pakistani nationals were arrested in Kathmandu and fake Indian currency worth Rs 25.4 lakh recovered from them. Chairman of Rastriya Janata Dal and son of a former minister, Ansari is believed to be the biggest conduit of FICN from Nepal.

Ansari who is reportedly Dawood Ibrahim’s aide survived a murder attempt when an Indian hitman shot at him in March this year inside the Kathmandu prison where he is presently lodged. The arrest and subsequent attack has however had no impact on shipment of FICN from Nepal to India.

The malaise of FICN will remain and continue to threaten India unless stringent measures are employed. During his Nepal visit in April, External Affairs Minister SM Krishna raised India’s concern at growing FICN smuggling through the country.

But the unstable political scenario and deteriorating law and order in Nepal ensure that the issue of FICN doesn’t get the attention it should.

In the meantime, if you plan to visit Nepal this summer, just remember not to include 500 and 1000 rupee notes in your packing list.

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