India's Union Ministry of Home Affairs is seeking to end cash flows funding militants in Kashmir.

For the past several years, Indian police and intelligence agencies said, Muslim hawala agencies have diverted millions of dollars to Kashmir. They said the funds came not only from Pakistan and Saudi Arabia but various European nations via banking transactions.

To combat the cash flow, the Indian Union Ministry of Home Affairs has developed a high-level task force consisting of an expert committee that includes top members of the Intelligence Bureau, Enforcement Directorate, Income Tax Department, security agencies and Jammu and Kashmir Director General of Police Kuldeep Khoda to combat the problem, the Daily Excelsior newspaper in Jammu reported.

Prodding New Delhi's interest in staunching the flow of overseas funding was the recent case of Sayyid Ghulam Nabi Fai, the head of Kashmir American Council, who on Monday was sentenced in a U.S. court to two years in jail followed by three years of supervised release.

He had been charged with conspiracy and tax violations in connection with a decades-long scheme to conceal the transfer of at least $3.5 million from the government of Pakistan to fund his U.S. lobbying efforts related to Kashmir.

Fai pleaded guilty on Dec. 7 to a two-count criminal information of conspiracy to falsify, conceal and cover up material facts he had a duty to disclose in matters within the jurisdiction of executive branch agencies of the U.S. government and to defraud the U.S. Treasury Department by impeding the lawful functions of the U.S. Internal Revenue Service in collecting lawful taxes levied on the money.

"Mr. Fai spent 20 years operating the Kashmiri American Council as a front for Pakistani intelligence," U.S. Attorney Neil MacBride said. "He lied to the Justice Department, the IRS and many political leaders throughout the United States as he pushed (Pakistan's Inter-Services' Intelligence) propaganda on Kashmir."

An official source familiar with the investigation, speaking on condition of anonymity told the Daily Excelsior, "Though the hawala channels involving businessmen of New Delhi, Mumbai, Uttar Pradesh and some other states were used commonly to provide funds to separatist leaders, terror outfits, various other individuals and their organizations, the worrisome factor for the security and Intelligence agencies had been the use of banking transactions for funding militancy.

"Numerous instances have come to the fore wherein the hawala money reached Kashmir through banking transactions, not directly but from New Delhi. The transactions had been made from Pakistan, Saudi Arabia and various European nations by some individuals and organizations," the source said.