What is meant by Hawala?

The international definition given for hawala is this – money transfer without money movement.

        Suppose you live abroad, and want to send money to your relative here in India. The proper way is to transfer the money through banks, or other authorized financial institutions. But they will exchange your dollar for rupees only at a rate fixed by the government. You may lose a lot of money there. Besides, the institution will charge an extra amount for delivery and service.

        In such cases, some people prefer to take a bigger risk. They approach a hawala broker, who will help transfer this money without much expense. They just have to be given some commission, which is low compared to legal methods. Also, it requires no paper work.