NEW DELHI: With two back-to-back seizures last week of foreign currency worth Rs. 83 lakh, the Directorate of Revenue Intelligence and Customs department have been on the overdrive to check a possible revival of currency smuggling operations through Kerala airports.
According to DRI sources, the agency recently received a specific intelligence input on a rise in smuggling of foreign currency from Kerala, in return to the flow of smuggled gold from the UAE.
They regard the seizures from CIAL last week as just the tip of the iceberg as the actual amount being sent through this route could be several times higher, which is based on a back of the envelope assessment that only a certain percent of any smuggled item is being seized by the enforcement agencies.
“Based on the input, we have intensified surveillance on people bound to sensitive destinations like Dubai, Colombo and Kuala Lumpur.
Preliminary investigations have confirmed the involvement of a North Malabar-based hawala racket in both cases,” said a top DRI official.
Investigations so far have revealed that the bills, mostly Saudi Riyals, US Dollars and UAE Dirhams, were linked to illegal gold consignments from Dubai.
For instance, foreign currency worth Rs.56 lakh, seized from a Kannur native here on January 9, was equal to the price of two kgs of gold in UAE, the official pointed out.
“The gold for smuggling takes its origin in two routes, either in exchange for foreign currency from the hawala networks or as expats investments for evading the tax net. Among these, paying foreign currency is the most advantageous as it enables the racketeers to take advantage of the fluctuations in the currency market,” the official added.
K. N. Raghavan, Commissioner of Customs in Kochi, said that the smuggler’s rate of exchange stood somewhere between the official and hawala rates.
“This was far too common in our airports in the 80’s and 90’s. In these cases, the hawala rate of currency transaction will be slightly more than the bank rate, which is a key factor fuelling the smuggling of foreign currency,” he said.
Earlier last year, the Customs had affected similar back-to-back seizures of foreign currency worth Rs. one crore from the Kozhikode airport.
However, no major cases have been reported ever since.