“Get up !! Nanako !!! its 5’o clock, start reading for your model exam”, saying that her mom switched on the bed room’s light.
Nanako woke up and refreshed with the coffee made by mom J.
“Still 2 chapters are remaining!!” saying that she started reading the history book. She has the habit of reading aloud.
Nandini Krishnan aka Nanako , an eight standard girl with million dreams and going for IIT coaching class (that’s mandatory when you are born in the mid class family in India.)
Madhushri Krishnan aka Mitsi (Nanako’s mom), a pragmatic woman graduated on B.A history and currently designated as home maker J .
You may think, the above information may be useless for the topic. But this has the tight bond with the story.
This article will narrate on “how mother coolly teaches the subject to the daughter before the exam? ” and we are also going to learn about the hot topic called HAWALA from their conversation.
Actually, most of the Indian mom doesn’t do it. Instead, scold the children for the last minute study.
Mitsi entered the room and Nanako was so worried about the exam.
Mitsi (M): Hey Nanako!! Relax… Nothing to worry!! Read as much as you can and she sat beside her.
Nanako (N): Okay Mom!!
Halwa money is the ancient system of money transfer…
(She pronounced “Hawala” as halwa)
M: Hehe!! What did you say??
N: HALWA …oops !! it’s HAWALA (after seeing the book keenly)
M: Don’t spell halwaa… Haha !! Though, the meanings are rather similar (little sarcasm)…
N: Mom!! Do you have an idea about it? If you can share the info, that would be useful for me.
M: Yup!! It’s like giving “halwa” to the government 😜
In short words, “Transferring the money from one hand to other illegally without the government consciousness”….
N: Hmm…Can you elaborate it?
M: Hawala means trust. It is an alternative or parallel remittance system, which works outside the circle of banks and formal financial systems.
N: From where it is originated? Is it in India? Legal or Illegal?
M: Well!! Hawala is an ancient system of money transfer which originated in South Asia and is now being used across the globe. This system developed in India also, before the introduction of western banking practices.
It is also sometimes referred to as “Underground Banking”.
Though it is being used across the world to remit funds, but it is not a legal system.
N: How will it work? How the money transfer takes place?
M: It works on the basis of many middle men called the hawaldars or the hawala dealers.
In a hawala transaction, there is no movement of cash.
N: ohh…No cash movement !! If it transfers through net banking, then it would be accountable and legal. And, how will the money transfer??
M: As said earlier, Hawala system works with a network of operators called Hawaldars or Hawala Dealers.
- A person willing to transfer money contacts a Hawala operator/ dealer at the source location.
- The hawala operator/ dealer collect the money from that person who wishes to make a transfer.
- The secret code or passcode is shared among everyone involved in the transaction.
- He then calls upon his counterpart or the other Hawala operator/ dealer at the destination.
- Receiver collects the cash from the Hawala operator/ dealer using the passcode.
N: Mom!! Can you give some instances?? and Why the people use this approach?
M: Sure!! Let me give you the brief instances.
(She took pen and paper and drew one flow chart)
Blue Line: Passcode FLOW
Red Line: cash flow
A: Source (Kattappa in UK)
B: Destination (Kattappa’s family in India)
X,M – Hawala operators/agents
Kattappa(A) is a taxi driver staying at UK on an expired tourist Visa. He wants to remit some money for his family (B) in TamilNadu , India. He cannot approach an authorized money transfer agent/bank there as he is an illegal immigrant in the UK.
Kattappa hands over the cash to the UK hawala operator(X) and received the passcode. The UK hawala operator then calls his Indian counterpart (M) and asks him to deliver funds to Kattappa‘s family member (B) with the passcode.
Any member of Kattappa’s family can now collect cash from the Indian Hawala operator, after deduction of commission charges and on producing an authentication code/passcode.
N: Who are the current users of this informal network?
M: Migrant workers, Terrorists (to fund their activities)
Politicians (to convert black money to white money),
N: Really Interesting!!! Mom… One doubt ?? How the cash flow happening among the hawala operators?? And It seems that BitCoin also hawala ?? Maybe silly but curious to know!!
M: Hawala agent is the big network. They settle periodically. The flow may not only through cash. It can also be Barter between the agents.
And you are correct about Bitcoin; still, it is illegitimate in India and kind of hawala.
N: Uff…Super cool!! Thanks mom. I understood the topic well. Let me revise the other chapters now.