Hawala Banking Katy Thorne QC Barrister Doughty Street Chambers
This seminar will cover
What is Hawala banking? • informal money transfer systems or alternative remittance system • money is passed on through a network of brokers or agents without the actual/physical movement of cash • the transmission of money in ways other than the regular banking routes and hence sometimes called underground banking • Based on trust, reputation and honour
Origins • originating in South Asia, as silk trade developed, hawala is popular all around the world • been in existence for hundreds of years, and pre-dates modern day financial systems • Also known as “mirror banking” or “chops” in China, “Hundi” in parts of India, “black market peso exchange” in south America, albakarat (etc etc)
Often linked to travel/import-export businesses Rajesh gives Dinesh money. Kiran pays out hawala to Rajesh’s sister Smitha Now Dinesh owes Kiran money Dinesh pays Kiran’s customer’s Dubai hotel bill
Trust • Very little paperwork – based on trust and honour • Rejash must trust Dinesh. Smitha has to trust Kiran. Two brokers have to trust each other • Hawala is often based on ethnic or family trust systems
Full speaker’s notes are available in the mebers login area with the video seminar