Taming the Untamable: Rethinking, Regulating, and Revamping Hawala





Political economy, Global justice, Banking, Hawala, Illicit financial flows, Financial regulation


This paper examines the Hawala system, an ancient remittance mechanism enabling money transfers without physical fund movement. Originating from medieval commerce in the Near and Middle East and China’s Tang Dynasty, Hawala now handles an estimated $100-$300 billion annually, operating in parallel with formal financial systems. Despite its vital role for unbanked communities, especially in South Asia and among migrant populations globally, Hawala is often associated with corruption and illicit activities, with post-9/11 links to terrorism and money laundering intensifying calls for its eradication. This study delineates Hawala’s historical roots, unique characteristics, and structure through illustrative examples. It dissects its widespread popularity, exploring geographical prevalence and competitive advantages. Focusing on India, the paper provides a comprehensive overview of Hawala’s socio-economic impact and regulatory complexities, advocating for a balanced dual-pronged approach to integrate Hawala into the formal economy without driving it underground.

Author Biography

Bilal Moin, Yale College & Yale Jackson School of Global Affairs, New Haven, CT, USA


Award information

This paper was awarded 1st place in the Tenth Annual Amartya Sen Essay Prize Competition 2023. Amartya Sen Prize is awarded to the best original essays examining one particular component of illicit financial flows, the resulting harms, and possible avenues of reform. Awarded by Academics Stand Against Poverty in partnership with Global Financial Integrity and Yale's Global Justice Program. The paper presentation can be found on the official Yale Global Justice Program YouTube channel: https://youtu.be/E6xINBjg2w8




How to Cite

Moin, B. (2024). Taming the Untamable: Rethinking, Regulating, and Revamping Hawala. Journal of Academics Stand Against Poverty, 5(1), 20–43. https://doi.org/10.5281/zenodo.11411586