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An informal system for transferring money, especially across borders, in which local agents disperse or collect money or goods on behalf of friends, relatives, or other agents without legal protection or supervision, trusting that all remaining obligations will be settled through future transactions.

[Arabic ḥawāla, bill of exchange, from ḥāla, to change, turn; see ḥwl in Semitic roots.]


(Banking & Finance) a system of money transfer based on promises and honour, practised in the Middle East and parts of Asia and Africa
ThesaurusAntonymsRelated WordsSynonymsLegend:
Noun1.hawala - an underground banking system based on trust whereby money can be made available internationally without actually moving it or leaving a record of the transaction; "terrorists make extensive use of hawala"
act of terrorism, terrorism, terrorist act - the calculated use of violence (or the threat of violence) against civilians in order to attain goals that are political or religious or ideological in nature; this is done through intimidation or coercion or instilling fear
banking industry, banking system - banks collectively
References in periodicals archive ?
The investigation centred around the activities of three travel agencies which used the Hawala banking system as a cover for money laundering between 1997-2001.
While technically legal, hawala banking provides plenty of avenues for shady activity and abuse, as it is largely unregistered, reported the online edition of Danish newspaper The Copenhagen Post.
Operating on trust, the hawala banking system leaves no paper trail apart from a hawaladar's own records.