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Business Standard

Maharashtra hawala operators on wait-and-watch mode

In Maharashtra, Mumbai is hub of hawala operations with a daily turn over of Rs 1,000 cr

Election season has taken a toll on operations (the non-official and parallel system of money transfer through broker network) in Maharashtra, with most operators having stopped transactions or having left for vacation, fearing punitive action against them from the department and police.

In Maharashtra, Mumbai is the hub of hawala operations, with a daily turnover of Rs 1,000 crore, while Nagpur, the second capital of the state, clocks a business of Rs 40 crore, followed by tourist destination Aurangabad, with a Rs 20-crore business.

“Hawala transactions in the otherwise buzzing hawala destinations in C P Tank, Mumbadevi, and Bandra in Mumbai are not happening. During the ongoing election campaign, if the person on whose name say Rs 1 lakh is to be transferred is caught by police, the cash would be seized. Even though it is a legal transaction, the person would face legal action. Hawala, also known as hundi, is an informal value transfer system based on trust and an efficient network of money brokers. However, nobody wants to take a chance, and instead, keep quiet,” a leading operator from south Mumbai, who did not want to be named, told Business Standard.

On the other hand, some operators in the busy C P Tank area near Girgaon in south Mumbai said their associates had left the city for vacation with their families. “Some of them have gone on pilgrimages to avoid the axe from the tax and police authorities,” the operator said.

Nagpur’s Itwari area, a leading centre for textile, clothing, grain, gold and bullion, houses about 150 hawala operators. “After the announcement of the election code of conduct, there has been practically no business. Police and tax authorities have stepped up their vigil in the area. The other day, a person carrying Rs 50,000 in cash was picked up by police. We are in a wait-and-watch mode,” an operator said.

The income tax department recently announced its investigation wing had created a control room and complaint monitoring cell in various parts to control the use of and illegal inducements in the poll process.

The department has also prepared a team of chosen sleuths to monitor black money-related instances.

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