{"id":69643,"date":"2025-04-12T12:53:26","date_gmt":"2025-04-12T12:53:26","guid":{"rendered":"https:\/\/www.africa-press.net\/malawi\/all-news\/reserve-bank-of-malawi-eyes-crackdown-on-hawala-dealings"},"modified":"2025-04-15T12:01:39","modified_gmt":"2025-04-15T12:01:39","slug":"reserve-bank-of-malawi-eyes-crackdown-on-hawala-dealings","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/malawi\/all-news\/reserve-bank-of-malawi-eyes-crackdown-on-hawala-dealings","title":{"rendered":"Reserve Bank of Malawi eyes crackdown on \u2018Hawala\u2019 dealings"},"content":{"rendered":"

Africa-Press – Malawi. <\/strong><\/span>The central bank hopes this will improve remittance inflows and bolster forex reserves but a financial expert tips the government to maximise its advantages instead of curbing it<\/p>\n

Malawians living in the diaspora, particularly those using the Hawala system of payment, may soon start attracting punishment for using the method.<\/p>\n

According to the International Monetary Fund (IMF), \u2018Hawala\u2019 is an Arabic banking jargon. It means \u201ctransfer\u201d or wire.<\/p>\n

It is \u201can informal channel for transferring funds from one location to another through service providers\u2014known as hawaladars\u2014regardless of the nature of the transaction and the countries involved\u201d.<\/p>\n

IMF says while Hawala transactions are mostly initiated by emigrant workers living in a developed country, the system can also be used to send money from a developing country.<\/p>\n

The Reserve Bank of Malawi (RBM) has since disclosed that it will partner international banking institutions to crack down on the practice.<\/p>\n

The move follows a development in the United Kingdom where HM Revenue & Customs (HMRC) has announced plans to intensify its monitoring of informal money transfer services including the Hawala system.<\/p>\n

Authorities in the UK estimate that about \u00a32 billion is laundered annually through such networks, often linked to serious organised crime and at the expense of regulated financial systems.<\/p>\n

Macdonald Mafuta-Mwale<\/b>RBM Governor MacDonald Mafuta Mwale told Malawi News Friday that Malawi stands to benefit from such coordinated efforts through boosting foreign currency reserves and improving transparency in cross-border financial flows.<\/p>\n

\u201cIt will definitely help improve remittance inflows and the country\u2019s forex reserves.<\/p>\n

\u201cI am lobbying with other central banks in the region to criminalise this practice. Collaboratively, we will achieve a regulated, safer financial environment,\u201d he said.<\/p>\n

However, Rhodrick Junaid Kalumpha, a Malawian Chartered Accountant based in the United Kingdom, said the system is legal in other countries.<\/p>\n

He said what the government needs to do is to see how best it can use this system to the advantage of developing the nation.<\/p>\n

\u201cIt becomes illegal when it is used to advance criminal activities. My advice to the government would be to regulate the system and not stifle it. It needs to register all Hawala agents in Malawi,\u201d he said.<\/p>\n

He also doubted whether the government would succeed clamping down on the system as it plans.<\/p>\n

\u201cThere will be little or no impact from the Malawi government efforts, especially if the diaspora is not involved in the formulation of steps to control the system,\u201d he said.<\/p>\n

Some Malawians in the diaspora say the official rate of the Kwacha in the banks is generally fixed and not appealing for them to use formal channels to send money back home.<\/p>\n

Although unregulated, Hawala is said to have long been a lifeline for diaspora communities, especially those sending money to regions with limited banking services.<\/p>\n

Under Hawala, money is transferred through a trust-based network of operators.<\/p>\n

No physical cash moves across borders; instead, the agents in one country communicate with their counterparts elsewhere to facilitate transactions.<\/p>\n

The system\u2019s anonymity and lack of formal oversight have made it an attractive conduit for illicit financial activity, according to authorities in financial crimes.<\/p>\n

Louise MacDonald, HMRC\u2019s Deputy Director for Economic Crime, said the goal is not to shut down legitimate remittances but to bring them into the legal fold.<\/p>\n

\u201cInformal money transfer networks, like Hawala, enable people to support family members in parts of the world where conventional banking is limited. These are vital services that we want to protect from criminal exploitation,\u201d she said.<\/p>\n

Under the new UK directive, all money transfer businesses must register with HMRC and comply with anti-money laundering supervision.<\/p>\n

Failure to do so could result in civil penalties, prosecution, and business closure.<\/p>\n

For More News And Analysis About Malawi<\/span> Follow Africa-Press<\/span><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Malawi. The central bank hopes this will improve remittance inflows and bolster forex reserves but a financial expert tips the government to maximise its advantages instead of curbing it Malawians living in the diaspora, particularly those using the Hawala system of payment, may soon start attracting punishment for using the method. According to […]<\/p>\n","protected":false},"author":84,"featured_media":69642,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5],"tags":[234],"class_list":["post-69643","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","tag-malawi"],"yoast_head":"\nReserve Bank of Malawi eyes crackdown on \u2018Hawala\u2019 dealings - Malawi<\/title>\n<meta name=\"description\" content=\"The central bank hopes this will improve remittance inflows and bolster forex reserves but a financial expert tips the g ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/malawi\/all-news\/reserve-bank-of-malawi-eyes-crackdown-on-hawala-dealings\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Reserve Bank of Malawi eyes crackdown on \u2018Hawala\u2019 dealings\" \/>\n<meta property=\"og:description\" content=\"The central bank hopes this will improve remittance inflows and bolster forex reserves but a financial expert tips the g ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/malawi\/all-news\/reserve-bank-of-malawi-eyes-crackdown-on-hawala-dealings\" \/>\n<meta property=\"og:site_name\" content=\"Malawi\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2025-04-12T12:53:26+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-04-15T12:01:39+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/malawi\/sites\/36\/2025\/04\/sm_1744449917.634604.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1280\" \/>\n\t<meta property=\"og:image:height\" content=\"720\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/malawi\/all-news\/reserve-bank-of-malawi-eyes-crackdown-on-hawala-dealings#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/malawi\/all-news\/reserve-bank-of-malawi-eyes-crackdown-on-hawala-dealings\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/malawi\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"Reserve Bank of Malawi eyes crackdown on \u2018Hawala\u2019 dealings\",\"datePublished\":\"2025-04-12T12:53:26+00:00\",\"dateModified\":\"2025-04-15T12:01:39+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/malawi\/all-news\/reserve-bank-of-malawi-eyes-crackdown-on-hawala-dealings\"},\"wordCount\":634,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/malawi\/all-news\/reserve-bank-of-malawi-eyes-crackdown-on-hawala-dealings#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/malawi\/sites\/36\/2025\/04\/sm_1744449917.634604.jpg\",\"keywords\":[\"Malawi\"],\"articleSection\":[\"all news\",\"economy\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/malawi\/all-news\/reserve-bank-of-malawi-eyes-crackdown-on-hawala-dealings#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/malawi\/all-news\/reserve-bank-of-malawi-eyes-crackdown-on-hawala-dealings\",\"url\":\"https:\/\/www.africa-press.net\/malawi\/all-news\/reserve-bank-of-malawi-eyes-crackdown-on-hawala-dealings\",\"name\":\"Reserve Bank of Malawi eyes crackdown on \u2018Hawala\u2019 dealings - 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