Hawala is an unofficial way of money transfer, which does not involve any actual movement physical money.
Interpol's describes hawala as "transfer of money without any physical movement." Another description of hawala is basically "trust."
Hawala is utilized today as an alternative settlement channel that exists beyond the conventional financial frameworks.
Exchanges between hawala dealers are made without promissory notes in light of the fact that the framework is vigorously founded on trust and the balancing of hawala representatives' books.
How does hawala work? Suppose Ravina needs to send Rs. 50,000 to Ravi, who is a resident of another town.
She will go to a hawaladar, Rohan, and give him the sum of money she wants Ravi to get, including the subtleties of the exchange; the name of the beneficiary, city, and the secret key.
Rohan communicates with a hawala dealer in the beneficiary's town, Virat, and requests that he give Ravi Rs. 50,000, depending on the prerequisite that Ravi correctly states the secret key.
Virat moves the cash to Ravi from his own account, after he subtracts commission fees, and Rohan will owe Virat Rs. 50,000.
The exchange started by Ravina and finished by Ravi’s receipt of the funds takes just one to two days or, in certain cases, only a couple of hours.