Definition of "hawala" [hawala]

• A system for remitting money, primarily in Islamic societies, in which a financial obligation between two parties is settled by transferring it to a third party, as when money owed by a debtor to a creditor is paid by a person who owes the debtor money. Hawala transactions are usually based on trust and leave no written record. (noun)

American Heritage(R) Dictionary of the English Language, Fifth Edition. Copyright (c) 2011 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

• "Much of the funding came through a black-market banking system called hawala, which is common throughout the Middle East and South Asia."
• "“Operation Green Quest is focusing on the informal, largely paperless form of money exchange known as hawala, which is Arabic for ‘to change.’”"
• "That is because a preferred method of transferring illegal money is called hawala."