Hawala

A specific form of an alternative or parallel remittance system operation. It exists and operates outside of, or parallel to ´traditional´ banking or financial channels. It was developed in India, before the introduction of western banking practices, and is currently a major remittance system used around the world. Distinguishing components are trust and the extensive use of connections such as family relationships or regional affiliations. Unlike traditional banking or even the ´chop´ system, hawala makes minimal (often no) use of any sort of negotiable instrument. Transfers of money take place based on communications between members of a network of hawaladars, or hawala dealers.