Context: A poaching network in central India, using digital payments with “hawala funds” and multiple supply lines to Nepal and Myanmar, has taken out “100 to any number” of tigers since 2022, an investigation by The Indian Express has found.

Background: –

• Hawala enables fund transfers without physical money movement, similar to banking transactions. However, unlike banks, it operates through informal, unregulated channels based on trust. A vast network of hawaladars facilitates these transactions, primarily in West Asia, North and East Africa, and the Indian subcontinent.

How Hawala works

• A person ‘A’ working in Muscat wants to send money to his father ‘B’ in Lucknow through the hawala system.
•  To do so, ‘A’ deposits the amount with a hawaladar in Muscat, receiving a token—either a physical item (such as a banknote) or a code transmitted via phone or electronic means. ‘A’ then shares this token with ‘B,’ who presents it to a hawaladar in Lucknow to receive the equivalent amount. 
• Notably, no physical transfer of money occurs between Muscat and Lucknow; instead, the hawaladars at both locations settle the accounts later through their network.

Despite there being no legal recourse in case of fraud, hawala transactions are popular, and see a variety of uses.

• Sending Remittances: Remittances are funds sent by migrant workers to their homes, to support their families. Many migrants, especially those working in West Asia, use hawala because of convenience and lack of access to formal systems. 
• Illegal Activities: While sending remittances using hawala may or may not be illegal, many illegal operations — from smuggling and money laundering to drug trade and terror finance — use hawala networks for the anonymity, and lack of regulation and scrutiny they offer.

Source: Indian Express