Hawala (sometimes called underground banking) is a way to transfer money without actually moving any currency.
Hawala networks have been used since ancient times, and today they are widespread among expats sending remittances home.
Hawala ensures anonymity in its transactions as no official records are kept and the source of the money cannot be traced.
Hawala also finds its footing in the world of financial technology, which gives access to remittances among the unbanked or underbanked population of the world.
Some countries such as India have made hawala illegal due to its informal nature and lack of regulation or oversight.
The 3-6-3 rule is a slang term for an informal practice in banking, especially in the 1950s, 1960s and 1970s, that was the result of the industry’s uncompetitive and simplistic conditions.
The account balance represents the available funds or present value of an account of a particular financial account, such as a checking, savings or investment account.
The annual equivalent rate (AER) is the actual interest rate on investments, loans or savings accounts that can be obtained after compounding interest.
The bank reconciliation report summarizes the banking and commercial activities by reconciling the organization’s bank account with its financial statements.
A bank run occurs when large groups of depositors withdraw their money from banks at the same time, out of fear that the institution will become insolvent.