Hawala transaction and money laundering practices in India

1. A presentation on

2.  Hawala transaction : it is
the informal system for
money transfers.
 Money Laundering
Money Laundering is a
process by which illegal
funds and assets are
converting into legitimate
funds and assets

3.  An informal value transfer
system
 Also known as Humdis
 Origin in islamic classical
law
 Based on honour of hug
network
 No promissory notes

4.  Safe
 Fast
 Cost effective
 Tax Saving
 Illegal
 Using code for
remittance.
 Operates with networks
 Hawala agents
 Traditional way of money
transfer

5. Sender
( Want to
Sent
Money )
Hawala
Broker
Home Place
Country
Receiver
Hawala
Broker
Another
Country

6.  past 6 decades India could have lost 1.5
trillion dollars in the form of tax
avoidance and 40 per cent of this amount
are all hawala transactions.
 Kerala alone has an annual remittance of Rs
23,000 crore in form of hawala money, it just
goes on to speak volumes about the
problem.

7. Source of
Income
• Tax crime
• Fraud
• Drugs
• Thief etc
• Corruptions
Placement
• Changing of
currency
• Change of
denomination
• transportation of
cash
• Deposits
Layering
• Withdrawal in
cash
• Wire transfer
• Cash deposits in
other bank
• Split and merge
between banks
Integration
• Disguise
ownership of
assets
• Criminal funds
used in the third
party transaction
• Fictitious sale
• Creating finance
,Loan

8.  Hawala creates black money
 Hawala felicitates to money laundering.

9. 0
5
10
15
20
25
2008 2009 2010 2011 2012 2013 2014 2015
Cases
Cases
Source :study on money laundering by
Paridhi Saxena, NLU, Raipur

10.  Money Laundering Act 2002
 FEMA 1999

11.  The hawala transaction is the one of the way
which can creates black money and
felicitated the money laundering process .
 India is uses hawala transaction many of the
politicians are use this way for disguise the
back money