Pakistan’s federal government on Tuesday approved a nationwide crackdown on hawala and money laundering networks, as part of efforts to strengthen financial oversight.
The decision was taken at a high-level meeting jointly chaired by Finance Minister Muhammad Aurangzeb and Interior Minister Mohsin Naqvi.
Officials said illegal money transfer operations would not be tolerated under any circumstances.
Approval for regulated channels
Both ministers stressed the need for a remittance system that is transparent and secure.
They said funds sent from abroad must go through banks or other authorised channels.
Informal systems, often known as hawala or hundi, have long been used to move money outside official oversight.
Authorities now want to limit these practices by closing gaps in the system.
The process of sending money abroad through exchange companies is also expected to be reviewed to ensure better monitoring and compliance.
Focus on enforcement
Officials at the meeting agreed that strict action would be taken against individuals and businesses involved in illegal transfers.
They said there would be no leniency for those found linked to money laundering or informal networks.
The government also plans to target what it described as “big money launderers”, signalling a broader enforcement effort beyond small operators.
A joint working group will be set up to oversee the crackdown.
It will include representatives from the State Bank of Pakistan (SBP) and the Federal Investigation Agency (FIA).
The group is expected to monitor progress and review measures to curb illegal financial flows on a regular basis.
During the meeting, the central bank governor briefed participants on the current system for sending money through formal banking channels.
Economic concerns behind the move
Hawala networks have been a longstanding issue for Pakistan’s economy.
Experts say they divert remittances away from the banking system, reducing official foreign exchange inflows.
Officials believe that improving oversight will help increase transparency, support foreign exchange reserves, and bring the country in line with international standards on financial regulation.
The government says strengthening legal channels for remittances is a key part of its wider economic reform efforts.
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