The Hindu Business Line : Gulf migrants remittances — `Alternative to hawala working well in UAE'

A GLOBAL Informal Value Transfer System (IVTS), based on electronic transfer of funds, is emerging as a solution for migrant workers remitting money back home.

The system can also reduce the problems associated with hawala, according to Dr Roger Ballard, Director, Centre for Applied South Asian Studies, University of Manchester, UK.

Dr Ballard told Business Line on the sidelines of the second international conference on hawala currently under way in Abu Dhabi, that IVTS, akin to electronic banking, is an emerging solution that could prove to be the alternative to hawala.

"As the use of electronic transfer of funds increases and facilities are created to enable people to remit funds in this manner, it will provide an effective way to transfer funds, while also allowing authorities to relevantly regulate the activities," Dr Ballard said.

Money exchange houses and even a lot of hawala operators are now using e-transfer of funds and if more facilities are in place in the receiving countries, this could be of immense benefit for migrant workers, he said.

He pointed out that due to the large migrant population in the UAE and the rapid developments in banking, including infrastructure for electronic transfer of funds, UAE has become a hub in what is a global informal value transfer system driven by migrant remittances.

Dr Ballard, who has been studying the migrant patterns of Asians in the UK, particularly Indians and Pakistanis, over the past two decades, defended the hawala practice among migrant workers as a simple, easy, cheap and less bureaucratic way of transferring money to families back home.

"What drives hawala is the inefficiency of the banking system and from the migrants' point of view, it is an efficient way of transferring money. What we can do is relevantly regulate transactions to find out where the money is coming from and if funds are found to be illegally acquired, they can be stopped.

He also referred to the contradiction existing between the perception of heavy weight law enforcement which views hawala as a conduit for illegal and terrorist activities and another line of argument that stresses on the huge development finance received by way of remittances from a large number of migrant workers in many parts of the world.

"This aid is viewed as better than international aid and what is therefore needed is to bridge the gap between the two viewpoints in order to catch the criminals who are few and help the thousands of migrants and their poor families, he said.

In this context, he viewed the emergence of IVTS as a useful method that could benefit workers and help regulators keep track of activities.

More Stories on : Information Technology | Forex

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Rayalaseema Bank posts all-time high profit of Rs 28 cr

Gulf migrants remittances — `Alternative to hawala working well in UAE'

Further softening of interest rates likely

IOB to ramp up priority sector lending in lead dist

Prudential Co-op Bank depositors in a quandary; threaten stir