Hawala operators find new route to convert black money to white

Published: 19th November 2016 10:18 PM  |   Last Updated: 20th November 2016 07:30 AM   |  A+A-


Dirhams given by an NRI to a hawala agent. The former gets `1.5 lakh in India, albeit in scrapped Rs 500 and Rs 1,000 notes

KOCHI: The demonetisation drive has forced hawala operators to find new ways to turn black money into white, especially in the Gulf region. The traders in Dubai have indeed found a new method too.

The modus operandi: An NRI gives 3,500 dirhams to a hawala agent. The former gets `1.5 lakh in India, albeit in the scrapped `500 and `1,000 notes. The present exchange rate of 3,500 dirhams is around `64,000, doubling the profit. As the amount is below `2.5 lakh, no queries will be made while depositing the amount. “One of my friends was approached by an agent for such an exchange. The traders said they would deliver the amount in old currency denominations at home,” said John, who works in Dubai.

Hawala is a money transfer system widely used in Arab countries and South Asia. The money is paid to an agent who instructs an associate in the relevant country to pay it to the final recipient. Akshay Agarwal, MD, Acumen Capital Market India, said: “People with unaccounted money are making all efforts to get it accounted. Hawala agents will find a way to deal with it.


Heavy Wait Business

Women employees at universities in Andhra have formed groups and are offering help to colleagues who have hard-earned unaccounted money. Educational institutions, hospitals, private companies increased salaries of their staff or are given money to deposit in their accounts. Each being handed over `2-5 lakh depending on their loyalty. The amount would be returned in cash, in return for a small hike.

As the income through agriculture is not taxable, many black money holders are tampering with their accounts to show their income from agriculture. This has come as a blessing for politicians in Andhra Pradesh where majority of them own agricultural lands.

The obvious is making use of domestic maids, construction workers and other people from lower economic backgrounds. Enquiries made in some cities show how the cash-rich took a few such to deposit amounts.

In an educational institution group whose owner is into politics, students who worked for him during the general elections, have been entrusted with the task of converting the black money into white. In return, students are being offered pocket money. Students who are in-charge of these transactions, were promised two-wheelers. Some institutions are offering gadgets like laptops.

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