Hawala (‘Havaleh’ in Persian) is an alternative or parallel remittance system that operates outside or parallel to the traditional banking system. It is an ancient system (known as Hundi) originating in South Asia. In hawala, money is not transferred physically i.e. money transfer without money movement.
The advantage of hawala is that its commission is less and there is no need for a Bank account to be opened. In India, both black and white hawala are considered to be illegal.