By Rob Corder
Abu Dhabi conference debates solutions for the regulation of informal fund transfers.
The Governor of the UAE Central Bank has called for all informal systems of funds transfer to be regulated.
A three day conference, organised by the Central Bank in Abu Dhabi, is debating the issue, primarily the popular system of Hawala.
In his opening address to the conference, His Excellency Governor Sultan Bin Nasser Al Suwaidi said that more regulations should be devised and introduced to isolate further those who misused the Hawala system.
Hawala is increasingly under scrutiny in the post 9/11 global economy where tracking the movement of money is seen as a weapon against terrorism.
The system has proved extremely difficult to monitor, largely because of its simplicity.
The most basic hawala system a customer approaches a hawala broker in one city and gives a sum of money to be transferred to a recipient in another city. The hawala broker calls another hawala broker in the recipient's city, gives disposition instructions of the funds - usually minus a small commission - and promises to settle the debt at a later date.
The system is popular for poorly paid Asian workers in Dubai, who need to send money home to their families, but have no access to banking services.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.