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Financial transaction

transnational role of underworld

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Financial transaction

  1. 1. Financial Transaction:Role of underworld Jaideep Chatterjee* At present, one fourth of our total financial transactions being remitted through illegal practices by collective group of persons, neither they nor their source of money so far been physically known to ordinary and most ordinaries, though the operation and operators are very much within the society, where we live and share everything together. The illegalities had been adapted during the 70’s as one of the mode of livelihood to gaindecent full money in order to lead a dignified life within shortest span by a few smugglers of gold , later joined mainly by drug, arms and ammunition supplier , preferably from almost every metro cities across the country. Today which popularly known as Hawala racket and have been recognized as the most favorable route of damaging the ¼ of the economy, a portion could have been utilized if those transactions would have taken place through formal route as did by law abiders of the same land. Just after the indirect involvement of dishonest bureaucrats, police officials, politicians and distrustful traders in such money transaction Hawala became another recognized source of easy money even for the elite group of Indian society. The source of hefty amount of transactions for example drug paddling, women & child trafficking and smuggling of bovines have taken place in more organized form, as the earlier favorite money minting transactions” smuggling”of gold and arms and ammunition were reshaped in the form of cottage industries and handed over to petty criminals, even between the semi/educated youth of the prudent locality. How the process recognized by the agencies like, Income tax, Enforcement directorate and Financial Fraud investigation Bureau or even by most active bureau like C.B.I, economic fraud to the nation and the applicable method as one of the major threat to our economic as well as demographic development have been making successful money without proper hindrances and became popular mode of money operation for dishonest community is a matter of deep observation. When we analyses the process and method of such transactions we found that our country face the loss of more amount what estimated in general budget annually. Modus operands The emergence of informal transaction through all possible illegal terms and conditions including smuggling, fake currency and human trafficking have enabled in establishing a parallel source of easy money as a challenge to F.D.I. responsive scenario, prevailing within our economic, political, social and technological environment .Another damaging trend brought of entire operation is it did introduce an intercontinental network under organized consortium as threat to our investigative agencies. Hawala racket has been proved a success full tools to lure and the people of all age group indiscriminating white or black profession. This process of transaction has been gaining popularity day afterday and could oriented bad (criminals) and good (white collars) on the platform of common objective. Manipulation, alteration, corruption, inflation and volatilization are the principle source and the nefarious nexus are the assisting tools to run the business amounting more than value of our agricultural production. Combined efforts, skilled based functional techniques made them ahead than our investigating agencies, more competent operator even beyond unknown political boundary. LPG (Liberalization, Privatization, Globalization) have givenus the opportunity to become aware with world yet not known from any four corners to another, this exposures have enlarged the sources and enriched the involved members with all possible information duly acknowledged as an ample scope, area or location of smooth operation. Their modus operandi is an advantage to human kind. Disadvantageous factor is modern society becomes a follower of illegalities and we import unique combination of law breakers and law makers as neo rich to modern society. Frauds overpowered traditional value based population, fabrics knitted on ethical prices torn apart, morale begin to surrender before unaccountable wealth transactions and did manage to post a significant role in the entire operation, officially known as underworld transactions, gradually became popular and safest mode of transmission due to nonpayment of further taxation.
  2. 2. Another reason what makes this process more favorite method amongst needy is; in a formal process through formal route if anybody want to get money as fast what availed in E.C.S. then the process could be availed to such need y as well provided; 1) The credential of sender and receiver are not under scanner. Their identities must be free to all and recordable on each transaction. 2) The purpose of amount and terms and condition of the said transaction has to be clarified as when demanded or required. 3) The volume of amount is restricted and should not cross 30,000 dollar at a time for an individual. 4) Institutional transactions must carry a corporate identification number (the source of entire gamut of financial health) above all the volume of transaction must be transacted as per guidelines framed under FERA & FEMA. 5) Transactional commission, conversion charges, levies and taxes on service are variable and increasing day after day therefore every transaction has to follow them in order to receive and remit the payment as white as the process of formal route. 6) The source of inflow as well as out flow must have to be disclosed whether the rules violated by either party in any manner than prosecution action duly be allowed and followed. This is hard to justify which one, formal or informal routes being adapted by even needy but latest transaction of 6,200 crores of amount through Delhi based bank of Baroda, by as many as 59 fake account holder under the veil of commercial transaction at a Hongkong based bank have proved neither formal nor the informal routes are favorable route to transact the volume of black money of India at any corner of the earth. E.C.S process have facilitated the illegal transaction in smarter mode than ever before, resulting loss of revenue more than the average income of our half of the population. To avoid payment emerged through each transaction , besides black money holders, ordinary people alsohesitate and don’t prefer to adopt formal route, which is validand one of the known source of revenue generation to the government concerned, transaction are held therein. Where as greedy and under world community all along been in practice to evade the charges and taxes by hiding their source of fund. Since 1970, a common path of remittances are practiced through most active network popularly known as HAWALA, unfortunately, such illegalities gradually became a recognized procedural method of money transfer and begun to treat ignorable offence, when professionals, politicians and traders in large joined and support the process and so farbeen continued without looking at the poor economic health of own land and its people. The outcome is it had damaged our system as well as enabled to destabilize the financial position in international forum. A new empire of parallel economy had emerged and thousands of million amount having been transferred in abroad without evidential proof of knowledge to the local authority. Loss of revenue Let us see the volume of national currency seized under the unlawful activities (prevention) Act during 2014 from different part of India------- Province Volume of Amount Andhra Pradesh 54.4 lakh Assam 07.9 lakh Andaman & Nicobar 0.3 lakh Bihar 83.9 lakh Chhattisgarh 80.9 lakh Gujarat 85.7 lakh Goa 26.67 lakh
  3. 3. Haryana 16.67 lakh Jharkhand 89.99 lakh Jammu & Kashmir 1.4 lakh Karnataka 2.1 lakh Kerala 0.69 lakh Manipur 0.04 lakh Mizoram 2.3 lakh Oddisha 10.5 lakh Punjab 30.65 lakh Sikkim 0.1 lakh Tamil nadu 18.37 lakh Uttar Pradesh 12.95 lakh West Bengal 19.85 lakh Source: N.C.R.B. Recently our investigative agencies had to meet with another challenge, when thousands of crore unaccounted money unearthed from the so called lottery operators in Kolkata alone. Their operations were so organized and technically sound the fake game veiled as lottery, became part of life to those ,who earns less than 10,000 per month, approximately, 60% of the entire population are found involved directly besides known profession across the country. One thousand four lakhs amount already been transferred in the different account of Pakistan, U.A.E, Hongkong, Mauritius based financial institution from collection of such fake game through our nationalized and privately owned bank, which proves lacunas and loopholes in our banking system. In addition to detected amount, another dollops of thousands of crore seizedon the spot. How did they do their money minting business? Answer is interesting; first, they are well communicated against abnormal rate of commission, which motivate them to accomplish their tasks uniform manner across the country. Secondly, none of the subscriber of sold tickets are considered for prize money, prizes are chosen from unsold bundles, therefore at the end of the day operators become the owner of entire amount, looted from daily wager, vendors, petty salaried and small traders of the locality and the population below 10,000 per month income group. What they do with hues amount? Being collected at the end of each day? A fund, Manifolds non planning budgetary expenditure, even of existing NAVARATNAS!! The entire amount siphoned off to keep on terrorism and terrorist activities in our land, because government of neighboring country and U.A.E. are ready to cooperate them by providing a safe and secured shelter to conduct destruction against India but not agree to bear the expense from already weak sate fund, which prompted them to create a nefarious nexus and a trustable network in order to meet required expenditure for ongoing destructive activities in the present society. The allocation of fund in scarcity have put forwarded them with no choice of option, except how to generate hues amount of
  4. 4. money as soon, that they could arrange and repeat their objectives above all appeared to become a biggest threat to peace loving law abiders community and a fresh constraint before a developing economy. The way of collection are vividin nature and broader in operation like; Smuggling of bovines, human drugs, arms and ammunition and import of suicidal bombers , fake currency racket and on-line gambling , had played a significant role in reunification of their network more active than pre internet era. Worldwide connections, easy access, with remitting process and nexus between locals have kept them alive and their activities even without state fund. Core Banking System (C.B.F.S.), Weak law, irrelevant regulations and corrupt authoritative attitude have provided ample opportunity to transit the fund from any private or public sector bank without being questioned identity or verifying their credibility. We must congratulate our honest sincerer officials of Enforcement Directorate and Income tax department. They genuinely did conduct genuine raids and found 1265 Bank Accounts, duly run and owned by Hawala racketeers through out the country. This disclosure proves that if our investigating agencies are allowed to do their job, they could free our land from improvised threat of parallel economy. Let us see, another figure, depicts negative scenario and impends growth as well as damages financial security, due to the active presence of HAWALA account holder in our society. State Nos. of HAWALA A/c Operating Bank Nos. of HAWALA A/c Andhra Pradesh 47 Bank of Baroda 63 Bihar 291 Bank of India 47 Delhi 119 Central Bank of India 10 Kerala 81 AXIX Bank 17 Madhya Pradesh 109 H.S.B.C. Bank 33 Maharashtra 65 H.D.F.C.Bank 26 Tamil nadu 39 I.C.IC.I. Bank 59 Uttar Pradesh 137 Punjab national Bank 52 West Bengal 180 State Bank of India 852 * *Figures denotes state prominent in illegal transaction Interesting feature of the above accounts is, operators of the account play the role fund collector in India but beneficiary utilize them in destructions from abroad. Another interesting out come of the entire operation is, due to non disclosure of the source and identity of the receiver of the fund, racketeers did manage to create potholes in our financial transaction process and has been able to deviate the scale of fiscal growth under constant declining mode. Further study suggests that following activities (i) Cow smuggling (ii) Drugs pedaling (iii) Arms and Ammunition supply (iv) Fake currency (v) On/off line lottery, Gambling are the major source, which sustain under world community and their illegalities alive and active across the nation.
  5. 5. In the wake and advent of latest technology, professionals other than under world’s occupation begun to associate with a new source of black money brought in to light, as mentioned below; (i)Fake currency (ii) Loan amount (iii) Siphoning off public fund (iv) Loot of natural elements (v) Corporate plundering e.t.c. Unfortunately, new resources are populous and favorable option of fast and easy money allocation amongst traders, politicians, technocrats, bureaucrats and more unfortunately being increased alarmingly. Let us examine how far the aforementioned activities have been proven as the safest and ideal mode of operational way to take away existing resources of our national land and nationals in favorof anti national activities. Cow Smuggling We are aware of the facts related to cow. Cows mainly bull or ox, some time non productive bovines are sold in the market and on the price determined by the smugglers, because slaughtering under the veil of trading are not allowed in 24 provinces out of 29 in India. Though, India is the largest exporter of beef, which combines the meat of goat, sheep and camel. Last year India did a business worth of 7.34 trillion of Indian currency through beef export. Indian earns hand some revenue, when beefs are exported via official register, but loose while smuggled through unauthorized agents, situated at different districts of Assam, Jharkhand, Tripura and West Bengal.Majority of then prefer to shift available herds through line between the international border formally known as informal route, without legitimate payment fixed on other export items . Bangladesh import 30 to 35 lakhs cow every year, last year the official calculation was 30 lakhs 80,000. Despite ban, smugglings are in continuation, which put the traders of India in disadvantageous position, Bangla authority permit them to make money through smuggled items as validas other trading on two conditions (i) smugglers are bound to fill up and signon an undertaking that cows were “found loitering in and around informal route” not purchased from any owner, inhabits in Indian land.(ii) smugglers are bound to pay 500 I.N.R. against each cow during every transaction. The annual turnover of last year was more than 3.5 crores unfortunately; India did get nothing through entire transaction. Cash amounting thousands of croe are generated at every fiscal, from the animals of Indian land grabbed and shared by everyone involved therewith, except agencies responsible for revenue generation, due to norms and values ethically followed and maintained in our trading policy. Finally, India faces loss, Bangladesh does registerunexpected growth in import duty collection and be availedwith adequate quantity as well. Need of the hour is, how to recover and convert the resources of unaccounted transaction in to white revenue. Women & Child Political instability, weak economy, illiteracy, manmade or natural disaster are the causes behind human trafficking, which is thriving beyond the known landscape and have emerged as an impending factor in the demographic development to the nation known as developed country of the world. Though SAARC zone are the worst affected victim of human selling and purchasing, a crime committed in a society, where your and family live together. Latest battle took place either in Syria or in gulf region have produced different picture and proved SAARC zone are no longer only victim of human trafficking. Earlier we witnessed how a lion share from bifurcated U.R.S.S. population mostly child and women had to take refuge and occupied the profession of flesh trading in search of livelihood, in the region other than their known landscape including India. Terrorism and continual attacks are another cause of destitution of healthy, wealthy society of women and child society in to refugee. Women and children are openly sold by the members of ISI. Three eighty times attacks on the innocent population of Bagdad had left 1 thousand 257 people dead and another 3 thousand 654 got severely wounded. 1.5 million Including women and children became destitute and took shelter in Germany, owing of cynical war broken in Syria.Half of the million died due insurgency situation in and around gulf country. 1.5 million Wounded afresh and never regained to retain dignified life. 37,000 children died in the month of April May and June, 275 thousands of children had lost their school forever. Selling-purchasing of women and children had begun as 40 lakhs, (4 million) found homeless and forced to occupy the profession, practiced during the period of slavery.
  6. 6. The figures are remain unchanged in 2015 rather has been putting us in a situation of grave condition than never before. On the month of April of 2015, more than thousand died while crossing between Malta and Sessile. 950 fresh destitute have appeared as burden from Libya alone and 478 infiltrators had to face sabotaged act on anchoring in the safest bank of Italian sea from Libya and Syria . a few decade ago, scenario was different, confined within the boundary of III rd. World, (coined by a French demographer), where lives are controlled on the moods of monsoon, listed as poorer among poorest, featuring lower capita income but higher mortality with dense fertility in larger size than middle east and European countries indeed under trouble. Today around 5 lakhs nearly more than half million women and girl child of a single country namely Nepal aged between 7 to 38 are languishing in the different brothels of India, Pakistan and U.A.E. due to illiteracy, which grown in to poverty. An efforts has been made in order to get an image of trading volume and involvement of traders through following table, encompassing women and child trafficking activities, thoroughly conducted by underworld networking as one of the money minting process after conversion of a community in to a commodity within modern society. Profession No. of victims Age No. of Agents/Supplier commission/deal * Domestic worker 50 million 7 to 65 35,000 500-1000 Child laborers 300 million 5 to 17 57,000 1000-1775 Drug peddlers 1.7 million 17 to 50 41,000 1600-2500 Arms and ammunition courier 2.5 million 18 to 45 100,000 2,000-4,500 Fleshtrading 4.2 million 12 to 40 1,50000 8000-45,000 Sex tourism 0.5 million 10 to 19 26,000 5,000-20,000 Suicidal bombers 0.62 ‘’ 20 to 35 17,000 500,000-250,0000 Pornography shooting 0.77 ‘’ ‘’ ‘’ ‘’ ‘’ ‘’ 1,500 – 37,000 Vendors 15 million 7 to 70 50,000 2,000 ---25,000
  7. 7. Beggars 22 million 5 to 80 8,000 050 --- 200 Camel racing 0.4 million 6 to 14 5,000 1,000--- 5,000 Thefts 0.97 million 5 to 17 32,000 90% share of valuables Mining 32 million 5 to 40 15,000 50 --- 500 Rag pickers 0.87 million 8 to 17 15,000 60% share of collection Glassware makers 1.50 million 6 to 14 18,000 500 --- 1,000 Attendant in bar, hotels eateries 0.88 million 5 to 15 77,000 500 --- 1,000 Cottage industry 12.2 million 7 to 17 86,000 500 --- 1,000 Tea, coffee plantation 0.78 million 10 to 17 27,000 200 --- 800 Traditional agro farming 9.65 million 7 to 17 39,000 500 --- 1200 Hotel/kotha and Bar Dancer 0.50 million 12 to 35 21,000 5,000 – 25,000  Amount varies on occupation Source: Bureau of unorganized work/labor force Conclusion If we multiply the transacted amount received in each dealing, then amount would touch another thousand crore and our present system of banking management have permitted to manage and shift them without sharing any portion of revenue as desired and deserved by government. At present our banking system allowed to transfer worth of 1 lakh dollar without any document, which has encouraged the inflow as well as out flow of
  8. 8. black money and our financial institution including 19 commercial banks like oriental commerce, ING Vysa, Indus Ind and Yes bank have been taking active part to reestablish the empire of parallel economy. our banking system lacks electronic eye observation as need in each transaction postal department and branches in semi urban areas still continuing their operation with out electronic devices and facilities could detect the fake transactions. Today as per R.B.I. clarification more than 2.5 thousand crores of amount transferred illegally from a single place in Delhi. Further detection may reveal another source and actual amount what being claimed. Our collection of direct tax based on the contribution of only 3% proportion of entire population strength. Illegalities in Domestic nature are rampant in India, there are more than 25,000 manufacturing units and more than that service sectors are on operation across the country, unfortunately out of them only 200—250 companies have been showing their interest to represent their annual turnover through proper balance sheet as a part of corporate responsibility. Our system our infrastructure and our mode of operation are still miles away from any normal operation of developed nation. Physically we are rural, mentally corrupt, socially self centric, politically, unstable, culturally confused, economically bankrupt and morally degenerated in a manner as did not found in pre independence era. Government must behave and act in a process of creation of wealth not drainage of our economy, because we are at developing stage and bound to import the items , like essential commodities from neighbor, self sufficiency reflects in paper not in action, therefore government should make PAN as mandatory document for every financial transaction. There are 3 cross citizen who are bracketed under direct taxation means less than 3% are the genuine tax payer of the volume of one hundred thirtycrores population!! Which show how much we as an individual and in what extent our government as collective group is ready deliver good financial governance in order to compete those nations, who did attain liberty many years after august 1947? Lack of digital footprints gave us harshad Mehta, ketan parikh brand financial scams; we did not take lesson now every year cheat funds appear before us and mutely compromised by derailing the legitimate amount and the revenues proportionate to entire transaction. Government must take positive action to check and balance between the abnormal fees collected in terms of income by privately owned educational institutions, supreme court lawyers, famous medical practionners, chartered accountant and funds looted by N.G.O’s but never shown on paper neither served with proper receipt. Gold merchants and merchandise of other jeweler items, realtors, and land, water, forest and mineral looters are another potential source of black money , prefer to operate domestically incontinence and at the instances of corrupt local authority. If we would not be able to arrest them either domestically or in abroad then the graph of socio-economic development would remain an affair of exclusive growth, inequality among unity could never be erased, what promised and dreamed by the makers of modern India. *Author: Jaideep Chatterjee is an assistant professor, thinker of management studies in a well known college at Salt Lake City, in Kolkata. This piece of writing is one of the portion of course work of his research work, currently engaged titled: transcendental changes in corporate and natural environment: impact on human kind. Jaideep.chatterjee12@gmail.com deep.jai@rediffmail.com

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