Agarwal adds that some NRIs in the US transferred money by 'hawala' 10 years ago after India's nuclear tests at Pokhran because they feared that they may be pressurised to leave the US.

After 9/11, a new element of financing terrorist operations has crept in -- black money transfers, in addition to financing drugs. Terror groups are using 'wire money transfer' channels and credit cards to send money for terror strikes in India. So the Indian government set up the Financial Intelligence Unit - India (FIU-IND) in 2004 for receiving, processing, analysing and disseminating information relating to suspect financial transactions.

All banks and finance companies are bound every month to inform FIU-IND about all cash transactions of over Rs.1 million and its equivalent in foreign currencies; all cash transactions below Rs.1 million and its equivalent in foreign currencies; all cash transactions in forged or counterfeit currency notes and all suspicious transactions.

This unit has unearthed an impressive number of underhand dealings as detailed in its annual report and has been granted more powers to track down more. Now Indian outlets of foreign wire transfer services and casinos have also been ordered to report their transactions every month.

Banks and finance companies now implement strict rules to identify everyone who operates or opens an account with them. This concept, 'Know Your Customer', has been advocated by Agarwal for some time. He has also devised a CD-ROM Principle for India's Black Money where C stands for pay Cash Carry Certificates; D for Delays, Deficiencies and Denial of certificate; and ROM for Rest on Mat as cases are never taken up and gather dust!