underground banking

Underground banking refers to informal financial systems operating outside regulated institutions, used to transfer money across borders without official oversight.

The most common form is hawala, where brokers in different countries settle debts through trust networks rather than actual money movement.

People use underground banking to avoid fees, circumvent currency controls, or move funds anonymously—sometimes for legitimate remittances, sometimes for money laundering or sanctions evasion: The investigation revealed an underground banking network moving millions to shell companies.