BBC Online India has launched a new service in the United Arab Emirates to make it quicker for the large number of Indian expatriates there to send money home. It is estimated that $10bn of the $14bn sent to India each year currently passes through unofficial channels. The scheme is part of the Indian government's campaign to crack down on money laundering, and is intended to help reduce unofficial money transfer practice known as Hawala or Hundi. Officials in the United States believe that terrorists have used this informal and anonymous system to move money around the world. Last year the United States accused one transfer company of funding terrorists.

Fast track
Senior officials say the new money ordering facility will be more popular because money can now be received in less than ten minutes through computerized post offices. The Indian Post Office also hopes to get a 10% share of remittances sent this way. Until now Hawala has been the easiest way for millions of South Asians living abroad to send pay home to relatives. It allows people to escape a country's exchange controls while providing a better exchange rate, and it's also traditionally been faster than official channels.

Unofficial channels
Hawala transactions go through a specialist broker. The person who wants to send money gives the broker the cash plus a fee. That broker then contacts their counterpart in the recipient's country who delivers the money. The money itself doesn't move, either electronically or physically. The system is based on trust and the brokers balance the transfers over time. Although some people who currently use Hawala may be persuaded to use the new service, it's likely the unofficial channels will remain popular with people who don't want any record of their financial dealings. The International Money Order Service in the United Arab Emirates has been launched in association with Western Union Financial Services.