THE HAWALA SYSTEM

Eva Ladanyi, () and Istvan Kobolka ()
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Eva Ladanyi,: Chief Advisor at Ministry of Human Resources, Hungary,
Istvan Kobolka: Head of Department for the Institute of National Security in the National University of Public Service, Hungary

Interdisciplinary Management Research, 2014, vol. 10, 413-420

Abstract: The authors in their article review a well-known money transfer system in Middle-East and Asia. There is an alternative remittance channel that exists outside of traditional banking systems. The main focus of the article is why and how does the systems work in practice? Hawala or hundi is a method of transferring money without any real movement. Transactions between hawaladars or hawala operators are done without promissory notes because the system is heavily based on trust. One definition from Interpol is that Hawala is “money transfer without money movement.” Hawala originated in Asia during ancient times, and is used in many regions in the world today, especially in the Islamic community.

Keywords: Hawala; padala; hundi; hawaladar; informal funds transfer (IFT); Sh’aria (search for similar items in EconPapers)
JEL-codes: E26 N15 (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:osi:journl:v:10:y:2014:p:413-420

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