Money Laundering and Hundi Raising Concern
The rising use of Hundi – the illegal business of monetary transactions – is once again creating concern among the authorities. In the NWFP, an operation has been launched against money laundering and Hundi while news sources have reported an alarming increase in Hundi transactions in Rawalpindi (Punjab).
Hundi, also known as Hawala, works by a group of brokers in different countries, mostly split between Pakistan and the Arab countries like UAE, Saudi Arabia, Qatar etc. It is popularly used by Pakistani workers and businessmen who live and work overseas. No taxes are paid to the government for any of these transactions while the brokers’ group earns through charging the sender a fee per transaction and earning an extra something out of the difference in currency exchange rates.
A few months ago, the Federal Investigation Agency (FIA) started a crackdown on Hundi/Hawala dealers in Rawalpindi. This forced the business of Hundi/Hawala into dormancy. Now, it is surging again while the authorities are not moving into action against the dealers. However, in the NWFP, the FIA has launched a province-wide operation against money-launderers and Hundi dealers. At least 6 people have been arrested and over 8 million rupees recovered in a single day in Peshawar alone. However, there has been no news, so far, of any such activity against dealers in Hundi or money laundering in other parts of the province.