Counterfeit currency was and continues to be one of the most pressing economic crimes in the modern interconnected world, impacting the integrity of financial systems, the stability of the nation’s economy, and the daily life of the common man. During the 2021-22 period, the rate of Fake Indian Currency Notes (FICN) detected at the RBI was 6.9% and the rate of FICN detected at other banks was 93.1%. Fake banknotes have been flooding the markets and the advent of newer technologies has opened new methods for counterfeiters to exploit. As per the National Crime Record Bureau’s reports spanning from 2016 to 2021, counterfeit currency amounting to a total face value of Rs 199.54 crore over the course of five years has been confiscated by law enforcement authorities. 

When counterfeit currency circulates in the economy, it diminishes the value of real money, distorting the inflation rates, which causes the markets to destabilize. This results in eroding the public trust and foreign governments in the financial systems and economic policies of the nation. In a judgement delivered in April 2024, Irshad v. State (NCT of Delhi), 2024 SCC Online Del 2361, decided on 3-4-2024, the Delhi High Court, while rejecting the bail application of the accused, observed that “the supply and circulation of fake currency notes represent a serious threat to the economy, national security, and individual well-being”.

Counterfeiting currency notes is an offence under the Indian Penal Code. Furthermore, the production, smuggling, or circulation of high-quality fake Indian paper currency, coins, or any other material has been classified as a terrorist act under the Unlawful Activities (Prevention) Act, 1967. Pan-India, in the year 2022, a total of 42,10,406 fake Indian currency notes worth Rs 382 crore were seized. Substantial consignments of FICN are initially brought to Nepal and Bangladesh from Pakistan through Gulf countries by air routes. Also, the counterfeit currency is smuggled into India through the porous international borders of Nepal and Bangladesh by global FICN syndicates.

FICN can be seen as a form of “economic terrorism” practiced by external sources to damage India’s economy. Economic terrorism refers to the behind-the-scenes manipulation of a nation’s economy by state or non-state actors. The circulation of FICN threatens India’s economy while the profit that is earned from doing so is used to fund covert activities targeting the nation.

Haji Abdul Rahman is a major player in the counterfeit notes racketeering in Kerala. He is a native of Muttumthala, Kolavayal in Kanhangad, in Kasaragod district. Earlier he used to smuggle silver from Dubai to India. 

Haji Abdul Rahman is an absconding accused wanted under the Conservation of Foreign Exchange and Prevention of Smuggling Activities (COFEPOSA) Act. A lookout notice was released in connection with a FICN case. According to NIA officials, Abdul Rahman is still at large and hiding in Gulf countries.

The National Investigation Agency (NIA) believes that Haji Abdul Rahman is still operating from Dubai. The Pakistan-printed FICNs came to Kerala and Karnataka through Haji Abdul Rahman. He uses unemployed Indian youth in Dubai as carriers. For carrying FICNs, he offers the carriers flight tickets from Dubai to India and back and also some percentage as commission. Haji Abdul Rahman prefers the Pakistani style of dressing and is known as ‘Amitabh Bachchan’ among the currency racketeering community. He is also known as Abdullah Haji, Haji Abdullah, Amitabh Bachchan Haji and Muttumthala Haji.  

Haji is wanted in three cases, including the Kochi Airport FICN case. In this case, a carrier was caught with FICNs of the face value of Rs 24.16 lakh, in denominations of Rs 500 and Rs 1,000. Haji Abdul Rahman, Sanal Kumar, and Mohammad Rafi, who are involved in this case are still absconding. The case was that based on specific inputs, officials of the Directorate of Revenue Intelligence (DRI), Kochi intercepted a passenger who had travelled by Flight No. EK-532 from Dubai to Kochi. He was found in possession of FICN to the tune of Rs. 24,16,000/- in 500 and 1000 rupees denominations. He was arrested by DRI officials and the fake currency notes were seized. The action was initiated under the provisions of the Customs Act. For initiating action under the provisions of the Indian Penal Code, officials of DRI, Kochi filed the first information before the Station House Officer, Nedumbassery Police Station. Later the case was transferred to the Crime Branch (CBCID) of Kerala Police. In view of the gravity of the offence the Central Government in the exercise of its powers u/s 6 r/w sections 8 of the NIA Act, the Ministry of Home Affairs vide order No. 11034/36/2011-IS-IV dated 6.01.2012 directed the NIA to take up further investigation of this case. An investigation by NIA revealed that the source of FICN was the absconding accused Abdullah Haji.

The FICN network is one of the channels of terror financing in India. FICN Coordination Group (FCORD) has been formed by the Ministry of Home Affairs to share intelligence/information among the security agencies of the states/Centre to counter the problem of circulation of fake currency notes. A Terror Funding and Fake Currency (TFFC) Cell has been constituted in NIA to conduct a focused investigation of terror funding and fake currency cases. The 2011 International Narcotics Control Strategy Report of the US Department of State underscored the scourge of FICN. The Report observed that “India (also) faces an increasing inflow of high-quality counterfeit currency, which is produced primarily in Pakistan but smuggled to India through multiple international routes. Criminal networks exchange counterfeit currency for genuine notes, which not only facilitates money laundering but also represents a threat to the Indian economy.” 

Indian intelligence agencies have already found that most of the FICNs in circulation in India are reportedly printed in government-controlled printing presses at Karachi, Multan, Quetta, Lahore and Peshawar in Pakistan, and the Inter-Services Intelligence (ISI) has a major role in it. 

As of July 2024, more than 100 accused have been convicted in terrorism and FICN cases, among others, under provisions of the Unlawful Activities (Prevention) Act (UAPA), in 18 months, according to the data prepared by NIA. According to the data, the NIA managed to get 79 accused convicted in 27 cases in 2023, followed by 26 in six cases in which the special courts pronounced their verdicts in the first half of 2024. If the five-year period (2019-24) is taken, the number of accused convicted in the various NIA cases has gone up to 354.

Haji Abdul Rahman is believed to be in hiding in the Gulf countries like a fugitive. As Sydney J. Harris puts it “Men make counterfeit money; in many more cases, money makes counterfeit men”.

The author is former Director General of National Academy of Customs, Indirect Taxes & Narcotics