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In an era of digital finance and strict banking regulations, the informal remittance system known as Hundi or Hawala continues to thrive, evolving with modern technology. Pakistani expatriates, who send billions of dollars home annually, are increasingly turning to social media platforms like TikTok to bypass high bank fees and government scrutiny.
This article explores the rise of Hundi 2.0, how digital platforms facilitate informal money transfers, the legal and economic implications, and whether such transactions pose risks to users and the broader economy.
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Hundi (or Hawala) is an informal and unregulated system for transferring money outside formal banking channels. It operates on trust rather than electronic records, allowing people to send cash without physical movement across borders.
Despite being illegal in Pakistan and many other countries, Hundi remains a preferred remittance method, and social media has now given it a new platform—especially TikTok.
Social media, particularly TikTok, Facebook, and WhatsApp, has given a new face to the centuries-old Hundi system.
A growing number of TikTok accounts openly advertise “easy and fast” money transfers for Pakistani expats in Saudi Arabia, UAE, the UK, and the US. These accounts:
The process typically involves:
While Hundi may seem like an easy way to send money, it has serious economic and security consequences:
Pakistan heavily relies on remittances, with expats sending over $30 billion annually. Hundi transactions bypass the formal banking system, depriving the economy of much-needed foreign exchange.
The State Bank of Pakistan (SBP) relies on remittances to stabilize the rupee. When people send money through Hundi instead of banks, dollar shortages increase, leading to rupee devaluation.
Governments monitor formal banking transactions to prevent illegal activities, but Hundi allows money to move undetected, raising concerns about money laundering and terror financing.
While Hundi might seem like an innocent shortcut, it carries serious legal risks for both senders and recipients.
Authorities in Pakistan and other countries have been cracking down on illegal money transfers, with many cases where:
Unlike banks, where customers have dispute resolution mechanisms, Hundi users risk losing money permanently if the agent disappears or gets arrested.
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While Hundi is tempting, there are safer, legal ways to send remittances:
Expats can use official banking services like wire transfers, mobile banking, and digital wallets to send money home. Banks offer:
Several global services provide low-cost, fast remittance solutions, including:
The State Bank of Pakistan launched RDA accounts to encourage expats to send money legally. Benefits include:
The rise of TikTok-based Hundi has added a new challenge for regulators, but authorities are taking steps to curb illegal remittances. As the Pakistani government improves banking accessibility, it’s crucial for expats to use legal remittance channels to support the country’s economy and avoid legal trouble.
While Hundi may seem fast and convenient, the risks—financial loss, legal consequences, and national economic harm—far outweigh the benefits.
This article is for informational purposes only and does not endorse or promote illegal financial activities. Readers are encouraged to use legally recognized financial services and comply with local and international banking regulations when sending money abroad.
Olivia
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2025.03.27
