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The Financial Action Task Force released a report on 3 September 2026 titled 'Investigating Professional Money Laundering, Underground Banking, and the Use of Hawala and Other Similar Service Providers'.
More than 80% of reporting jurisdictions identify underground banking and hawala-type providers among the principal channels used for professional money laundering.
Nearly 70% reported the integration of new technologies into these networks - a shift the report calls 'digital hawala'.
Digital hawala fuses traditional value transfer with encrypted messaging, fintech platforms, mobile wallets, stablecoins and other virtual assets, AI-based tools and purpose-built hawala applications.
A Turkiye case cited by the report shows the terror-financing risk: 2023 raids on an ISIL administrative officer recovered about $57,250 and later $554,000 in cash, along with hawala notebooks and digital transfer receipts.
Hawala moves value across borders without banking channels, settling through trust, brokers, cash or trade. Digital hawala is the same network run on encrypted messaging, fintech rails, virtual assets and AI tools, which makes it faster, wider and harder to trace.
Simple Analogy: The same underground courier network, now coordinating over an encrypted group chat.
Intergovernmental standard-setter for anti-money laundering and counter-terrorist financing, established in 1989 at the G7 summit in Paris; issues the 40 Recommendations, conducts mutual evaluations and maintains the grey and black lists
India's central agency for receiving, processing and analysing suspicious transaction reports and passing financial intelligence to enforcement agencies; India's main institutional interface with the FATF framework
Investigates money laundering offences under the Prevention of Money Laundering Act, 2002 and foreign exchange contraventions under FEMA, 1999, including hawala cases
India's principal anti-money laundering statute; it defines the offence of money laundering, provides for attachment and confiscation of proceeds of crime, and obliges reporting entities to file suspicious transaction reports with FIU-IND
Governs cross-border transfer of foreign exchange; hawala transactions bypass authorised channels and are contraventions under this Act
Carries the terror financing offences that hawala channels are used to fund, the risk the Turkiye case in the FATF report illustrates
The international standard against which countries are assessed; India's mutual evaluation report, adopted at the June 2024 plenary and released in September 2024, placed India in the 'regular follow-up' category, the best outcome, with compliant or largely compliant ratings on 37 of the 40 Recommendations
GS Paper 3 > Internal Security: Money Laundering and its Prevention; Linkages of Organised Crime with Terrorism
General Awareness > AML/CFT, Regulators and International Financial Bodies
General Awareness > International Organisations
Hawala and Other Similar Service Providers - the FATF's term for informal value transfer operators outside the regulated banking system
Laundering carried out as a service for a fee by specialists who are not themselves the predicate offenders
A virtual asset whose value is pegged to a reference asset such as a fiat currency, used in digital hawala to settle balances between operators
A bank or wallet account, often opened in another person's name, used to route illicit funds through several hops