Counterfeit Currency – The rise and fall of Pakistan’s Racket – Major Gaurav Arya (Army Veteran) explains


Mahender Mishar (Mishra) of Behar (Bihar) was a short, dark man, who had you met him in a dark alley, he would have probably greeted you with a polite Namaste and moved forward, head bowed. Until one fine day in probably the mid-1930s (year not known), the British media reported that this seemingly innocent man was a criminal mastermind who had perfected the art of making British counterfeit currency.

Mishra was packed off to prison. Later, Emmerich Heisenberg, a Nazi secret agent in London read about this in “Daily News” with great deal of interest. So impressed was he with the entire scam, that he sent a clipping from the newspaper to his boss in Germany, SS Major Bernhard Krüger.

While the Indian had done it for personal profit, Nazi Germany started doing it to damage the economy of England. 142 inmates, mostly Jewish, were gathered from Sachsenhausen and Auschwitz. Both have concentration camps with an evil reputation of sending Jews to the gas chambers. Top German artists, forgers and mathematicians were brought together under the express orders of Führer Adolf Hitler. Bernhard Krüger was made the mission leader, with express orders from Hitler to print counterfeit currency of an extremely high quality, which would pass even the closest of examinations.

Engraving printing plates, developing rag-based paper and breaking the serial number code was difficult, but Nazi Germany had no dearth of talent. By 1942, the Nazis were ready. The operation was named after Krüger. They called it:

Operation Bernhard!

And by 1945, till the time the Third Reich fell, and the operation was shut down, they had printed £134,610,810 worth of counterfeit currency in various denominations.

Nazi Germany used British counterfeit currency to fund their war efforts. It is said that the operation to rescue Il Duce Benito Mussolini was funded entirely by this counterfeit currency.

Someone at the ISI Headquarters at Islamabad must have been a keen student of military history, especially that of Nazi Germany. Soon after the first Afghan Jihad ended in 1989, the ISI started its secret mission of printing Indian counterfeit currency to destabilise India’s economy and fund its own version of “Jihad” in Kashmir.

This counterfeit currency was also to be used for funding terrorist activities in India. The modus operandi was the same as Operation Bernhard. So widespread was the practice that the government gave it a name. FICN (Fake Indian Currency Note) is now an accepted nomenclature for Indian counterfeit currency.

Intelligence sources have quoted to the media (also India Today of 6 November 2016):

Forensic opinion has revealed that the (counterfeit currency) notes have been printed on highly sophisticated machines involving huge capital investment. The pulp found to be 100% rag in the FICN, which is normally used in making currency papers. The perfection of window and watermark formulation indicates the manufacture of FICN paper on regular currency making machines, which can only be owned by a country or state. Most of the pivotal parameters of the paper like GSM (paper density measured in grams per square meter), Wax Pick Quotient, and Poly Vinyl Alcohol and pH Values were found matching with the legal tender of Pakistan.

According to a top-secret report complied jointly by RAW, Intelligence Bureau, Directorate of Revenue Intelligence and CBI, recently declassified and published by the media (also this News18 story on 8th November, 2016) says that the ISI earns an annual profit of Rs. 500 crore solely from its business of FICN.

Indian intelligence estimates that terror financiers incur a cost of Rs 39 for every Rs 1,000 note printed across the border – the RBI spends Rs 29 to print a Rs 1,000 note – but manages to sell it in India through various illegal channels at Rs 350-400.

The main channels of funnelling this cash into India are:

  1. D Company (owned and controlled by Dawood Ibrahim Kaskar of Karachi)
  2. Lashkar-e-Toiba (owned and controlled by Hafiz Mohammad Saeed of Muridke)
  3. Al-badr (owned and controlled by Jasneil Rihal of Khyber Pakhtunkhwa)

These three main conduits of FICN infiltration into India are controlled, protected and directed by the ISI. The counterfeit currency has mostly come into India from Dubai, Bangladesh, Nepal and Bihar (porous border areas).

When on 8th November 2016, these 500 and 1000 rupee notes were declared an invalid tender; it was not only a blow to corruption and black money in India; it effectively dealt a deathblow to the ISI’s main terror-financing machine.

Pakistan had gained tremendously by this scam. Not only did they damage India’s economy, they also earned money from India. Obviously, this was used for financing terror in this country.

This self-sustained cycle of terror and fraudulence is now effectively dead.

Major Gaurav Arya (Veteran)