Hawala is a transaction where a person gives the operator money in Indian Rupees and his agent collects money in another currency at a special conversion rate. Remember Indian laws do not permit depositing more than Rs 50,000 a day in an account.
So, HSBC was upto a lot of illegal stuff because it was acting as a Hawala Broker. And this – HSBC headquartered in London, is the 3rd largest bank in the world!
It is widely believed that there are about seven hundred Indian names in that list. That was in July 2011. It is this data that is now haunting the Indian government through Kejriwal. (It is a remarkable coincidence that the French concluded a multi-billion dollar fighter jet deal with us just then.)
Once the list was received, government of India apparently “swung” into action. According to Kejriwal, the IT department conducted searches in the premises of three such persons (One is not sure what happened to the balance). When confronted with evidences they admitted that they had bank accounts in HSBC abroad, which was not originally declared to the tax authorities.
This is where the plot thickens. Uniformly, the three independently have detailed to tax authorities as to how they managed to open, operate and get back their cash deposited in such accounts.
If documents released by Kejriwal are to be believed, all it requires is a phone call to HSBC who will depute their officers to open account, collect cash (in INR), have it deposited abroad (in currency of your choice), operate it under your instructions and then should you require, pay you cash (in INR) as and when required in India.
But, to be fair, HSBC wasn’t doing this just in case of India, but also in the US. There, however, the Government has started proceedings against it. Not in India. In India, it had to be revealed by Arvind Kejriwal (HSBC running money laundering transactions, says Kejriwal).
Here is a snapshot of what HSBC did in US. As you would see, it is classic Hawala Operations again.
According to Senator Carl Levin, chairman of the US Senate Permanent Subcommittee on Investigations, “the culture at HSBC was pervasively polluted for a long time.” Just how polluted was revealed in the Senate report into the scandal. For example, between 2007 and 2008, HSBC’s Mexican operations moved $7bn into the bank’s US operations. According to the report, both Mexican and US authorities warned HSBC that the amount of money could only have reached such a level if it was tied to illegal narcotics proceeds. This is explosive stuff for the “world’s local bank”, as HSBC calls itself.
Worst of all, there is a strong suspicion that in the US, HSBC’s money laundering activities were for the benefit of criminals of narcotic trade. Why wouldn’t that be true in India as well?
And, when we are talking about India and narcotics, we are also talking about people like Dawood Ibrahim and his network as well as the ISI network.
The obvious question is – why hasn’t the Indian Government – specially the Congress Party – taken any action against the bank and the culprits?