Pesa vs bitcoin calculator
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Sophisticated content for financial advisors around investment strategies, industry trends, and advisor education. A celebration of the 100 most influential advisors and their contributions to critical conversations on finance. The latest markets news, real time quotes, financials and more. What is ‘Hawala’ Hawala is a method of transferring money without any money actually moving. Interpol’s definition of hawala is “money transfer without money movement. Hawala, also known as hundi, means transfer or remittance. BREAKING DOWN ‘Hawala’ Hawala originated in South Asia during the 8th century and is used throughout the world today, particularly in the Islamic community, as an alternative means of conducting funds transfers.
Unlike the conventional method of transferring money across borders through bank wire transfers, money transfer in hawala is arranged through a network of hawaladars, or hawala dealers. 200 to John, who lives in another town. She will approach a hawaladar, Eric, and give him the amount of money she wants John to receive, including the details of the transaction — name of recipient, city, and password. 200, on the condition that John correctly states the password. Hawala dealers keep an informal journal to record all credit and debit transactions on their accounts. Debt between hawala dealers can be settled in cash, property or services. A hawaladar who does not keep his end of the deal in the implied contractual system of hawala will be tagged as one who has lost his honor and will be ex-communicated from the network or region.
Migrant workers who frequently send remittances to relatives and friends in their countries of origin find the hawala system advantageous. Hawala facilitates the flow of money between poor countries where formal banking is too expensive or difficult to access. In addition to the convenience and speed of conducting hawala, the commission rates are usually low compared to the high rates that banks charge. Hawala as Underground Banking The very features that make hawala an attractive avenue for legitimate patrons also make it attractive for illegitimate uses. Thus, hawala is frequently referred to as underground banking. Since hawala transfers are not routed through banks and, hence, not regulated by governmental and financial bodies, many countries have been led to re-examine their regulatory policies in regard to hawala.