BROWSE

Hawala

Definition

Hawala or hewala, also known as hundi or—in Somali, xawala or xawilaad—is a popular and informal value transfer system based not on the movement of cash, or on telegraph or computer network wire transfers between banks, but instead on the performance and honour of a huge network of money brokers. While hawaladars are spread throughout the world, they are primarily located in the Middle East, North Africa, the Horn of Africa, and the Indian subcontinent, operating outside of, or parallel to, traditional banking, financial channels, and remittance systems. Hawala follows Islamic traditions but its use is not limited to Muslims.

What is 'Hawala '

Hawala is an alternative remittance channel that exists outside of traditional banking systems. Hawala is a method of transferring money without any actual movement. One definition from Interpol is that Hawala is "money transfer without money movement." Transactions between Hawala brokers are done without promissory notes because the system is heavily based on trust.


Explaining 'Hawala '

Hawaladars, or Hawala dealers, arrange money transfers that are often backed only by trust, family connections or regional relationships. Hawala originated in South Asia during ancient times, and is used throughout the world today, particularly in the Islamic community as an alternative means of conducting funds transfers. Hawala is frequently referred to as underground banking, which is a misnomer because Hawala services often operate openly and legitimately.


Further Reading


Hawala discourses and the war on terrorist finance
journals.sagepub.com [PDF]
… Citigroup further advertises itself as ``an Economic Enter- prise'' with ``a global orientation, but with … In other words, the underground, dark, and illegitimate sphere of hawala and the legitimate … by most countries, including the USA and other G7 countries (The Economist 2002) …

Evolution and institutional foundation of the hawala financial systemEvolution and institutional foundation of the hawala financial system
www.sciencedirect.com [PDF]
… Citigroup further advertises itself as ``an Economic Enter- prise'' with ``a global orientation, but with … In other words, the underground, dark, and illegitimate sphere of hawala and the legitimate … by most countries, including the USA and other G7 countries (The Economist 2002) …

Demystifying Hawala: A look into its social organization and mechanicsDemystifying Hawala: A look into its social organization and mechanics
www.tandfonline.com [PDF]
… Citigroup further advertises itself as ``an Economic Enter- prise'' with ``a global orientation, but with … In other words, the underground, dark, and illegitimate sphere of hawala and the legitimate … by most countries, including the USA and other G7 countries (The Economist 2002) …

Coalitions of reciprocity and the maintenance of financial integrity within informal value transmission systems: The operational dynamics of contemporary hawala …Coalitions of reciprocity and the maintenance of financial integrity within informal value transmission systems: The operational dynamics of contemporary hawala …
link.springer.com [PDF]
… Citigroup further advertises itself as ``an Economic Enter- prise'' with ``a global orientation, but with … In other words, the underground, dark, and illegitimate sphere of hawala and the legitimate … by most countries, including the USA and other G7 countries (The Economist 2002) …

Formalizing the informal? Problems in the national and international regulation of HawalaFormalizing the informal? Problems in the national and international regulation of Hawala
books.google.com [PDF]
… Citigroup further advertises itself as ``an Economic Enter- prise'' with ``a global orientation, but with … In other words, the underground, dark, and illegitimate sphere of hawala and the legitimate … by most countries, including the USA and other G7 countries (The Economist 2002) …

Fund Transfers–African Terrorists Blend Old and New: Hawala and Satellite TelecommunicationsFund Transfers–African Terrorists Blend Old and New: Hawala and Satellite Telecommunications
www.tandfonline.com [PDF]
… Citigroup further advertises itself as ``an Economic Enter- prise'' with ``a global orientation, but with … In other words, the underground, dark, and illegitimate sphere of hawala and the legitimate … by most countries, including the USA and other G7 countries (The Economist 2002) …

Exploring the Ethical Dimension of Exploring the Ethical Dimension of
link.springer.com [PDF]
… Citigroup further advertises itself as ``an Economic Enter- prise'' with ``a global orientation, but with … In other words, the underground, dark, and illegitimate sphere of hawala and the legitimate … by most countries, including the USA and other G7 countries (The Economist 2002) …


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