[g__g]

The word is quite common in India. Here's a summary: Hawala transfers are mostly done by the underworld people (read gangsters, mafia, mob etc.) The most common application of hawala is in betting. In India, betting on sports is illegal but there is a huge underground network that takes bets on sporting fixtures(cricket being the fav.). To place a bet you have to know someone who knows a bookie, you speak to the bookie, ask him what the going rates are and place your bets without paying any initial money. If you lose you will be told where to deliver the money, usually it'll be to an agent in your city. After this agent has collected money from all losing parties, he is informed of all the people who won their bets in that city, he then transfers the same money to them, the difference between the two is the profit. This is just one application. Here hawala is mostly organized money laundering, reading the above comments I am surprised to see legal systems of practicing hawala.