July 19, 2002	Friday	Jamadi-ul-Awwal 8, 1423

NEW DELHI, July 18: A top US official said here on Wednesday that India’s inefficient banking system was letting funds leak through to international terror networks.

US Assistant Secretary for International Affairs Randal Quarles said India’s banks leave scope for illegal money transfers, a loophole inevitably exploited by terrorists.

“We think it is most important for India to focus on improving the efficiency of official and regular payment systems so that alternative systems become unnecessary,” he said.

The visiting official was referring to the hawala practice, a widely used method of illegally transferring money into and out of India tax-free. The Indian government estimates billions of dollars are moved by hawala every year.

Quarles, who is in India for a regional conference, said he held detailed talks on terror funding with India’s Economic Affairs Secretary C.M. Vasudev on Wednesday.

“The concerted efforts by the international community including India after the September 11 terror attacks have helped in freezing accounts with deposits of about 100 million dollars used for terror funding,” Quarles said.—AFP