‘It’s no longer attractive for hawala operators’

Has hawala dwindled in the last decade?That is a difficult question to answer because hawala refers to the illegal transfer of funds. Since ...

Has hawala dwindled in the last decade?
That is a difficult question to answer because hawala refers to the illegal transfer of funds. Since the transactions are necessarily clandestine it is difficult to estimate the prevalence or use of it as a channel. The Finance Minister said exactly the same thing in reply to a starred question in Parliament this budget session.

The question you should ask is, what is the premium on hawala. In 1991 for instance it was 27 to 28 per cent. In 2001, on the other hand, when the market rate of the US dollar was Rs 47.82, the hawala rate was Rs 48.56—a difference of 1.55 percent.

In 2002, the market rate (average of a year) was Rs 49.27, the hawala rate was 49.81—a difference of 1.09 per cent. So as years go by it is less of an attractive proposition for the hawala dealer who is in it only for the money?

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But it seems its use for criminal activity has not diminished
That will never be. Even with an efficient banking system and banking sector reforms, hawala is being used to transfer money even by those who are not in crime. But for criminals, it is the alternative to authorised channels and will continue to be in use. It is difficult to quantify.

Any estimates, even then?
The figures of our seizures are an indication, though not a complete picture of the situation.

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