Few Months ago, Times of Assam had published a report (Diamond Smuggling Trade flourishes in Thailand from India – Govt gives blind eye) stating how Illegal Trading of Diamonds is flourishing in the country. The illegal Diamond trade is mostly used for converting Black Money into white by smuggling the gems to Bangkok (who has a weak policy of Diamond Selling) and then selling or Buying it in different prices though online websites, who does not verify authenticity of selling the gems.
While India has largely been mesmerized by the stunt of banning 500 and 1000 rupee notes and upper class and middle class people has largely welcomed the move, the move does not stop corruption that largely happens through Hawala network as well as the illegal trade through diamonds and gold alike.
Buying of Gold and Diamond and its illegal trade
Case in point is the fact that The government’s sudden and unexpected move to demonetize currency notes prompted many people in the country to convert their unaccounted for cash into gold by buying jewelry, diamond and gold bars with extremely high per cent premium, up to 30-50%. The same is expected to continue with Goldsmiths selling the gems with backdated physical receipts; especially with buyers expected to be even agreeing to pay the taxes on behalf of the Goldsmith to convert the stashes of black money to white. But the worst part would be that a lot of Sale of the precious gems like Diamond and Gold, as reported in our earlier report is anyway taking place illegally and through Hawala networks, this money would still land up in foreign soil as there are no measures to control this trade.
Black Money is not always hard cash
Just few days back in Assam, a huge scam was unearthed n APSC selections and the Chief, Rakesh Pal was arrested. The raids found that he had truckloads of black money but not even 5000 rupees was reported to be found in cash! Which means that he had used his black money either in the investments of property or purchase, or used online means? The same applies for all big guns who indulged in illegal trade. While the petty trader or Doctors, Teachers with Private Tuition etc who hides their actual earnings will be adversely affected and have sleepless nights, the ones dealing in Millions and Billions would definitely not have their money in the form of cash; and hence would remain solely untouched with this move.
Funds of Insurgents & Terrorist – Does it really get affected?
While the collection of Funds from people and Business indeed happens in cash for militants and insurgent groups, it is widely reported that the terrorist funding largely happens through online channels. For instance, insurgent groups of North East India have been known to be using Online Means to transfer money for a long time; case in point is the fact that about 250 crores of rupees was reported to be transferred through Hawala to Bangladesh for the outlawed ULFA in December 2006. As reported earlier, About 2 years back, an International Report by Paris based Financial Action Task Force (FATF), a global body to set standards to combat money laundering and terrorist financing had revealed that illegal diamond trade account of India were suspected of being used for money laundering and financing of terrorist groups; and most of it happens through online or Hawala channels. This report in fact claims that India is one of the top five countries along with Israel, Belgium, Canada and the US where trade accounts of diamond business have been used to launder illegal funds. The same report had cited example of cases where Indian importers based in Surat and Mumbai imported diamonds from Hong Kong and China by grossly overvaluing them to up to USD 544.8631 per carat!!
Nano GPS Chips in New 2000 Rupee Notes – A Blatant Rumor
From evening of 8th November, one of the messages doing the rounds in WhatsApp or Facebook is the one that claims that the new 2000 Rupee Notes to be issued with contain a Nano GPS Chip that acts as a signal reflector where it can send signals to the satellite about its location. The hoax also claimed that such currency can be easily tracked & located even if it is kept 120 meters below ground level and that the satellite can identify the exact amount of money stored at a certain location. If a relatively high concentration of currency is found a certain location for a longer period of time at suspicious locations other than banks & other financial institutions.
India, which produces millions of techies, engineers and sends satellites to space every alternate week nowadays, was digesting this hoax like staple diet! Worst, this was also reported by several National Media houses!
It is to be mentioned that the technology mentioned itself is impossible to achieve for bulk production by RBI and can be possible only in James Bond Movies with Bond’s Special projects! The fact clearly remains that the rumor is unofficial and is not mentioned in any communication from RBI or Government Officials. It is impossible for a Nano GPS to send signals to a satellite for more than some meters; let alone satellites or transmitters kilometers away.
All of the above lets us to summarize that while this move is bold and unexpected, the results will definitely lead people to deposit more into bank (and thereby allow Banks to lend more) and bring revenue to the Government through additional taxes; it is hardly a way to contain the illegal trades, smuggling or contain black money which arises through black trades. Further, lies about Nano Chip in Currency notes is simply a dirty propaganda to mislead people who nowadays have got into a habit of believing anything that comes as a forward through friends or acquaintances in social media.