Hawala Network Detection: Can AI Track What Banks Cannot See?

Hawala has long been one of the most difficult financial networks for investigators to track. Unlike conventional banking transactions, hawala transfers leave little or no digital financial trail. Money changes hands through trusted intermediaries, while settlements happen separately through informal channels, trade-based transactions, or other methods that rarely appear in traditional banking systems.

Recent investigations continue to highlight the scale of this challenge. In the high-profile Mundra Port narcotics case, investigators alleged that ₹74 crore was transferred through hawala channels to fund terrorist activities. Since the transactions never passed through formal banking systems, conventional Anti-Money Laundering (AML) tools alone could not detect them.