From Sylhet to East London, dozens of people operate illegal hundi


While authorities in Bangladesh and the United Kingdom are consistently trying to combat money-laundering, terror-finance and illegal hundi (also known as hawala) activities, dozens of individuals in Sylhet and East London are continuing hundi activities by dodging eyes of the law enforcement agencies.

Mustafa (not real name), a middle-aged Bangladeshi living in Brick Lane area is seen walking into a ‘Cash & Carry’ store in the East End. Coerced by an organized crime group, he gives the Asian shopkeeper hailing from Sylhet, a wad of cash over the counter and a delivery address in Bangladesh. The shopkeeper puts the cash in his till and lets Mustafa know that his money will be delivered within the day. In this short scene, there’s a lot to unpack. Why is a ‘Cash & Carry’ shop taking large payments of cash? How will the cash reach its desired location in Bangladesh so quickly? Is this transaction legal?

Mustafa tells this correspondent, “Those of us in the South Asian (and financial crime) community will have recognized this as a hawala transaction (also known as hundi, fei ch’ ien, chit system or poey kuan). Hawala is an alternative remittance system pre-dating western banking practices which relies on trust and the extensive use of family relationships to transfer money without moving money”.

Although what Mustafa shows is money laundering, hawala is a legal method of money transfer in the United Kingdom used predominantly in remittance payments. The rise of digital remittance services such as Western Union and MoneyGram have led to a fall in the use of hawala, however, it is still preferred to traditional banking by many due to several attractive characteristics. But first, how will Mustafa’s money move from East London to Sylhet so quickly? The answer is not a wire transfer or a cashier’s cheque, rather, a simple set of steps:

  1. The shopkeeper will call up a trusted connection in Sylhet and ask for the delivery of the equivalent amount of cash in Bangladesh currency to the address Mustafa gave him,
  2. The Sylhet connection will rely on an informal delivery system rickshaws/three-wheeler or two-wheelers) to physically deliver the cash to the intended recipient,
  3. The shopkeeper will reimburse the Sylhet connection under the guise of normal business operations between their two shops or an “I owe you” tally will be kept to be settled at a later date.

It is clear that trust is the key factor that underpins this whole system. Trust between Mustafa and the shopkeeper, the shopkeeper and his Sylhet counterpart and his delivery unit. This single factor has led to hawaladars (hawala dealers) snatching up to 50 percent of the estimated remittance market in some countries.

There are several characteristics of hawala that make it attractive for both licit and illicit transfers of money, even with the advances in modern banking and payments:

  1. Cost effectiveness: Hawaladars have lower overheads than traditional banking institutions (as they operate from shopfronts) and exploit natural variations in the demand for different currencies. Hawala and other similar service providers usually charge 25-50 percent of the equivalent bank charge depending on destination of transfer.
  1. Reliability / efficiency: Instead of the multi-party system involved in a bank transfer, involving various correspondent banks, hawala uses trusted relationships to deliver money often within the same day.
  1. Anonymity: Although hawaladars are technically regulated by HMRC and the FCA as money transfer businesses, it is difficult to identify hawaladars and when they are identified records of individual transactions are not always kept and stringent KYC checks not always enforced. This allows customers to protect their identity and transfer large sums of money (the currency reporting threshold is £6,500 in the UK).

Hawala banking is responsible for the safe and cost-effective movement of vast amounts of money around the world for people who are under-served by traditional financial institutions. However, due to the prevalence of unregistered dealers and the ease of obfuscating identities and source of funds, hawaladars have also been targeted by money launderers during the placement, layering and integration stages of money laundering. On balance, it feels as if a blanket ban on hawala in the UK would be both impractical and damaging to financial inclusion. However, surely more can be done to ensure that Mustafa’s hawala transaction doesn’t end up fueling both violence on London’s streets and instability in Asia?

Hundi for terror-financing

According to sources, majority of the Asian immigrants living in the United Kingdom, United States and other countries use illegal hundi channels for sending “donation” to various Islamist militancy outfits as well as pro-Islamist political forces. In 2021, following arrest of a number of leaders of pro-Caliphate Hefazat-e-Islam it was revealed that this organization was getting fund from various anonymous “donors” in Pakistan, Middle Eastern countries, Malaysia, Britain and the United States for running its activities. Similarly, Al Qaeda affiliated militancy outfit ‘Ansar Al Islam’ (AAI) and other militancy groups in Bangladesh, India and Sri Lanka are using illegal hundi/hawala channels for receiving fund, which helps it in dodging eyes of the intelligence and law enforcement agencies.

Immigrants in East London Brick Lane area

Brick Lane is a street in the East End of London, in the borough of Tower Hamlets. It runs from Swanfield Street in Bethnal Green in the north, crosses the Bethnal Green Road before reaching the busiest, most commercially active part which runs through Spitalfields, or along its eastern edge. Brick Lane’s southern end is connected to Whitechapel High Street by a short extension called Osborn Street.

Today, it is the heart of the country’s Bangladeshi community with the vicinity known to some as Banglatown. It is famous for its many curry houses.

The street was formerly known as Whitechapel Lane, and wound through fields. It derives its current name from brick and tile manufacture started in the 15th century, which used the local brick earth deposits. The street featured in the 16th-century Woodcut map of London as a partially-developed crossroad leading north from the city’s most easterly edge, and by the 17th century was being developed northwards from the Barres (now Whitechapel High Street) as a result of expanding population.

Brewing came to Brick Lane before 1680, with water drawn from deep wells. One brewer was Joseph Truman, first recorded in 1683. His family, particularly Benjamin Truman, went on to establish the sizeable Black Eagle Brewery on Brick Lane. The Brick Lane Market first developed in the 17th century for fruit and vegetables sold outside the City.

Successive waves of immigrants settled in the area. In the 17th century, French Huguenots expanded into the area for housing; the master weavers were based in Spitalfields. Starting with the Huguenots, the area became a center for weaving, tailoring and the developing clothing industry. It continued to attract immigrants, who provided semi-skilled and unskilled labor.

In the 19th century, Irish people and Ashkenazi Jews immigrated to the area. Jewish immigration continued into the early 20th century.

The Sunday market, like those on Petticoat Lane and nearby Columbia Road, dates from a dispensation given by the government to the Jewish community in the 19th century. At the time, owing to the Christian observance of Sabbath, no Sunday markets were open. Located at the junction of Cheshire Street and Sclater Street, the market sells bric-a-brac as well as fruit, vegetables and many other items. In 2015 it was identified by police as the focal point of a trade in stolen bicycles and bicycle parts, many taken from people employed in the City of London who had used “cycle to work” schemes. Alongside seven arrests, the police also warned purchasers that buying bicycles or parts in deals “too good to be true” could make them guilty of handling stolen goods. Near the junction with Hanbury Street are two indoor markets; Upmarket and Backyard Market. The Brick Lane Farmers’ Market opened in 2010, intended to be held every Sunday in nearby Bacon Street; it has now closed.

In the later 20th century, Bangladeshi Bengalis from Sylhet comprised the major group of immigrants and gradually predominated in the area. Many Bengali immigrants to Brick Lane were from the Greater Sylhet region of what became Bangladesh. These settlers helped shape Bangladeshi migration to Britain; many families from Beanibazar, though they spread around the london city Jagannathpur and Bishwanath tend to live in the Brick Lane area.

In the 20th century the Brick Lane area was important in the second wave of development of Anglo-Indian cuisine, as families from countries such as Bangladesh (mainly the Greater Sylhet region) migrated to London to look for work. Some curry houses of Brick Lane do not sell alcoholic beverages, for most are owned by Muslims. According to EasyJet Traveller magazine, the top three curry houses on Brick Lane in 2021 are Aladin, Sheba and City Spice.

Bangalis in the United Kingdom settled in big cities with industrial employment. In London, many settled in the East End. For centuries the East End has been the first port of call for many immigrants working in the docks and shipping from Chittagong port in Bengal (the British Empire in India was founded and based in Bengal). Their regular stopover paved the way for food outlets to be opened; these catered at first for an all-male workforce, for family migration and settlement took place some decades later. Humble beginnings such as this gave rise to Brick Lane as the famous curry capital of the UK (alongside Birmingham’s Balti Triangle).

Designed by Meena Thakor, the ornamental Brick Lane Arch was erected in 1997 near Osborn Street to mark the entrance to Brick Lane and to ‘Banglatown’. Like Brick Lane’s lamp posts, the arch displays the red and green colors of the Bangladesh flag. Having contributed so significantly to the area, the Bengali community campaigned to get the arch installed to celebrate Bengali culture in Brick Lane.

Islamization of Brick Lane

With the flow of time Brick Lane has been gradually fallen under the grips of Islamists, while some of the areas had been declared as “Sharia Compliance Zone” by radical Muslims. Nightclubs, bars and pubs are facing constant threats from the Muslim immigrants, who are making frantic bids in enforcing strict sharia rule in the locality. All the mosques and so-called Islamic community centers in the area are engaged in hosting members of Tablighi Jamaat, an organization considered by counterterrorism experts as vessel of jihadist recruitment, while these places are involved in continuing hate-speech, anti-Semitism and anti-Hindu and anti-India propaganda.

Hundi dealers in East London

We already have assigned several investigative reporters in London and Sylhet to expose identities of individuals involved in money-laundering, terror-finance and illegal hundi transactions, based on which we shall publish series of reports soon.


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