DIFFICULT TO TRACE
Typically, a transaction begins with a visit to a hawala broker.
The person wanting to send money gives the broker the sum of money to be transferred plus a fee and the name and location of the person he wants the money delivered to.
The broker then gives his customer a receipt. The receipts are usually nothing elaborate, often just a bit of paper.
The broker then contacts a broker in the recipient's country. The recipient contacts the local hawala broker.
While the system may be ancient, hawala brokers routinely use fax machines or the internet to communicate with other brokers.
The broker is given a code. It could be anything. It could be a string of numbers, or it could be a $5 bill with a specific serial number sent to him by his relative.
Records are kept only until the transaction is completed. Then they are destroyed. The money does not move, either physically or electronically. Brokers dole out money from the same pool that they take it in. They make money from the fees they charge for the transactions.
The system is built on the trust between brokers, a trust built up between generations of hawala brokers.
Though the government has taken various measures to avoid these kind of transactions within the country, hawala is widely used measure. Till date no transaction is conducted as efficiently and smoothly like the hawala transaction.
This trust indeed is a boon to the people and a curse to the nation.
Typically, a transaction begins with a visit to a hawala broker.
The person wanting to send money gives the broker the sum of money to be transferred plus a fee and the name and location of the person he wants the money delivered to.
The broker then gives his customer a receipt. The receipts are usually nothing elaborate, often just a bit of paper.
The broker then contacts a broker in the recipient's country. The recipient contacts the local hawala broker.
While the system may be ancient, hawala brokers routinely use fax machines or the internet to communicate with other brokers.
The broker is given a code. It could be anything. It could be a string of numbers, or it could be a $5 bill with a specific serial number sent to him by his relative.
Records are kept only until the transaction is completed. Then they are destroyed. The money does not move, either physically or electronically. Brokers dole out money from the same pool that they take it in. They make money from the fees they charge for the transactions.
The system is built on the trust between brokers, a trust built up between generations of hawala brokers.
Though the government has taken various measures to avoid these kind of transactions within the country, hawala is widely used measure. Till date no transaction is conducted as efficiently and smoothly like the hawala transaction.
This trust indeed is a boon to the people and a curse to the nation.