𝐂𝐫𝐨𝐬𝐬-𝐁𝐨𝐫𝐝𝐞𝐫 𝐅𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐍𝐞𝐱𝐮𝐬: 𝐏𝐡𝐮𝐞𝐧𝐭𝐬𝐡𝐨𝐥𝐢𝐧𝐠 𝐚𝐧𝐝 𝐉𝐚𝐢𝐠𝐚𝐨𝐧 𝐍𝐚𝐯𝐢𝐠𝐚𝐭𝐞 𝐆𝐫𝐚𝐲 𝐙𝐨𝐧𝐞 𝐓𝐫𝐚𝐧𝐬𝐚𝐜𝐭𝐢𝐨𝐧𝐬

…𝒆𝒙𝒑𝒍𝒐𝒓𝒊𝒏𝒈 𝒕𝒉𝒆 𝒊𝒏𝒕𝒆𝒓𝒑𝒍𝒂𝒚 𝒐𝒇 𝒄𝒐𝒏𝒗𝒆𝒏𝒊𝒆𝒏𝒄𝒆 𝒂𝒏𝒅 𝒊𝒍𝒍𝒆𝒈𝒂𝒍𝒊𝒕𝒚 𝒊𝒏 𝒄𝒓𝒐𝒔𝒔-𝒃𝒐𝒓𝒅𝒆𝒓 𝒎𝒐𝒏𝒆𝒕𝒂𝒓𝒚 𝒆𝒙𝒄𝒉𝒂𝒏𝒈𝒆𝒔

By Krishna Kumar Sanyasi

The interdependence between this locality in Bhutan, Phuentsholing and its Indian counterpart, Jaigaon, has led to the emergence of a complex network of monetary exchanges operating in a grey area between convenience and illegality.
A ‘Mule Account’ is described as a bank account owned by a legitimate individual who permits another person to conduct banking transactions on their behalf. This practice effectively transforms the legitimate account into a ‘Mule Account’. On the other hand, a ‘Money Mule’ is an individual recruited by another party to transfer money illegally, often without knowledge of the source or purpose of the funds, in exchange for a fee or commission.

Jaigaon is a census town in Alipurduar subdivision under Kalchini block of Alipurduar district in the state of West Bengal, India. A bustling border town near Bhutan’s border is a popular destination for shoppers from across the country. However, many Bhutanese visitors face challenges when it comes to making digital payments due to the limited availability of platforms like Paytm and Google Pay.

Shopkeepers in Jaigaon have established partnerships with Bhutanese citizens in Phuentsholing, utilising their bank accounts for conducting business operations. As compensation, these retailers provide commissions to the Bhutanese account holders. This clandestine agreement not only evades the legal obligation of paying corporate taxes but also entails substantial financial transactions that are not disclosed or subject to taxation.

In a recent investigation, Bhutan TODAY uncovered a concerning network of individuals and businesses in Bhutan involved in illegal financial activities, particularly in the domain of mobile money transfer services. One such case involves a shop owner in Jaigaon, Sidhi (name changed), who has been accepting payments through mobile money transfer services from Bhutanese shoppers.

Sidhi, who owns multiple businesses in Jaigaon, noticed that Bhutanese shoppers often faced cash shortages while shopping in the area. In response to this, she decided to accept mobile money payments as a convenient alternative for her customers. To facilitate this, Sidhi used her Bhutanese friends’ bank accounts to receive mobile money payments from customers, paying her friend 2% commission at the end of each month.

According to Gopal, a businessman in Jaigaon, the COVID-19 pandemic has prompted Bhutanese shoppers to inquire about paying with the country’s digital currency, the Ngultrum through Mbob. Gopal stated that after learning about the services in detail, he has established a strong network with Bhutanese individuals in Phuentsholing. This has allowed him to partner with them to provide services to Bhutanese shoppers, creating a mutually beneficial situation for both parties. Additionally, Gopal mentioned that, due to the widespread use of digital payments, he now receives more payments digitally than in cash for his business transactions.

Jaigaon is home to numerous shops owned by Indians that have started using Bhutanese bank services, benefiting both the shop owners and Bhutanese shoppers. With the convenience of digital transactions, shop owners are able to receive payments quickly and efficiently.

Tshering Dema (name changed), a businesswoman in Phuentsholing, shared her experience of operating a business in Bhutan. She mentioned that receiving money digitally has made her business operations smoother, as withdrawing cash can be a time-consuming process with long queues at ATMs and banks. She expressed her delight in seeing QR scan codes of Mbob and Mpay in shops in Jaigaon, as it allows her and other shoppers to make payments easily using their digital wallets. Tshering emphasised the convenience of paying digitally over using cash, stating that she always opts for Mbob when shopping. The increasing acceptance of digital payments in shops has made shopping more convenient for people like her, eliminating the need to carry cash and providing a seamless payment experience.

The adoption of Bhutanese bank services in Jaigaon has not only benefited shop owners but has also made shopping easier and more convenient for Bhutanese shoppers. The shift towards digital transactions is a positive step towards a more efficient and modern economy, as she highlighted.

According to a spokesperson from the Royal Monetary Authority of Bhutan, “The emergence of ‘Mule Accounts’ and ‘Money Mules’ poses a significant threat to the integrity of our financial system. We are deeply concerned about the proliferation of mule accounts and the involvement of individuals in illegal financial activities. It is imperative for the public to understand the gravity of these actions and take proactive measures to avoid being implicated. In efforts, partnership with law enforcement agencies, aim to safeguard the integrity of country’s financial system and protect the interests of our citizens.”

“Such actions not only contravene the values of the Bhutanese Constitution but also represent a threat to the economic stability and transparency of the area,” the sporkperson added.

The intricate web of financial transactions between Bhutanese border town of Phuentsholing and its Indian counterpart Jaigaon has shed light on the shadowy world of ‘Mule Accounts’ and ‘Money Mules’. While the convenience of digital payments has transformed the shopping experience for Bhutanese visitors, the clandestine use of bank accounts for illicit financial activities poses a significant threat to the integrity of Bhutan’s financial system. As authorities work to combat these illegal practices, it is crucial for the public to be aware of the repercussions and for businesses to operate within the bounds of the law to ensure a transparent and stable economic environment for all stakeholders involved.