UNDERGROUND BANKING AS INSTRUMENT FOR THE LEGALIZATION OF „DIRTY MONEY“

Keywords:
Underground Banking, IVTS (Informal Value Transfer System), Money Laundering, Hawala, Hundi

Abstract:
This paper aims to study the way underground banking works and how it eases money laundering. Money laundering is the process of masking the original source of assets and making it usable without the risk of facing legal matters. This is preceded by criminal activity. Since it allows anonymity, lower costs and speed of transactions, underground banking makes it highly effortless to disguise sources. It actually represents informal values transfer system (IVTS), with the most well-known being Hawala, Hundi and others. Using this system is possible to make a transaction without leaving any trace, which attracts criminals. However, it was originally designed for different activities that have nothing to do with crime. With set regulations, informal banking still has significant use for illicit financial transactions. Secondary sources are used for this research.

CITATION:

IEEE format

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K. Kovač, “Underground Banking as Instrument for the Legalization of „Dirty Money“,” in FINIZ 2025 - The Importance of Business Agility in the Modern Business Environment, Belgrade, Singidunum University, Serbia, 2025, pp. 44-50. doi: 10.15308/finiz-2025-44-50 

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Kovač, K. (2025). Underground Banking as Instrument for the Legalization of „Dirty Money“. Paper presented at FINIZ 2025 - The Importance of Business Agility in the Modern Business Environment. doi:10.15308/finiz-2025-44-50

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