Mumbai: In major breakthrough in the hawala cases being investigated by the Enforcement Directorate (ED), the agency recently seized Rs 83 lakh from a bank locker in South Mumbai.

This was one of the three hawala-type transactions which were using the country's banking system illegitimately. The agency believes that thousands of crores of rupees is sent abroad illegally either through advance remittance for import of goods or by using forged documents submitted to banks thus making the country suffer substantial loss of foreign currency.

As published in Times of India, in the three cases, a total of $700 million (about Rs 4400 crore) was sent out of the country in the last six months to trading hubs like Dubai and Hong Kong.

ED suspects that the actual amount could also be three times that detected.

According to the report, in this sophisticated hawala-like operation, the accused used the lacuna in the banking system to commit the fraud and took advantage of the loopholes of the banking system.

A source revealing this information also told that accounts are opened in leading banks and co-operative banks by registering fake companies. He said that the cash is first deposited in the co-operative banks and transferred from account to account several times to obscure its source. After it reaches a big bank, of course, through an online transaction, payments are made towards advance remittances for imports. For this, fake import documents are produced.

The source said it is obvious that the racket cannot be carried out without the connivance of some bank officials. "Without their involvement, such an elaborate fraud cannot be carried out”, he added.

He further told that this money is received abroad by the racketeers' foreign partners who withdraw the sums in foreign currency.

"Thus, without importing anything, we are making payments in dollars. This is a loss for the country, a loss for India's banks," said the source.

Also, the fake registered companies vanish after showing a number of transactions and new companies are formed in their place.