Arabic word meaning "to change or transform". Adopted into both Hindi and Urdu, where it also gained the meanings 'trust' and 'reference'.

Also, the name of a simple, informal banking system originating in the Middle East and Asia but with a network that is worldwide. Although it is unregulated, (based on "trust"), and illegal in most countries, it is used by business and individuals alike as a means of transferring money.

It works like a wire transfer: You take your money to your local Hawala "shop", pay a small commission and give instructions as to the location of the desired recipient of your money. This information is noted down and transferred to the remote Hawala location via fax or telephone. The name of the intended recipient is not required: a simple password, (a letter and four numbers), is also supplied which the sender can exchange with the person collecting the money. This person then turns up at their local Hawala "shop", gives the password and collects the cash. Once the transfer has been verified, records of the transaction are destroyed at both ends.

The Hawala system is also known in some parts of the world as 'Hundi'.