Fema sounds deathknell for hawala operators

hyderabad: with legal transfer of money from foreign countries becoming a reality, hawala operators in the city have virtually gone out of business. the introduction of legal money transfer and other relaxations by the central government has resulted in a sharp decline in the number of hawala transactions in the city to the extent that almost all `gangs' involved in the business have switched over to other lucrative activities.decline in the hawala business came soon after the foreign exchange regulation act (fera) was changed to foreign exchange maintenance act in 2000 (fema). according to a hawala operator, there used to be transactions ranging from rs 8 crore to rs 10 crore through the hawala network, but now the transactions do not exceed rs one crore. this fact is admitted even by the enforcement directorate, which acts as the watchdog to prevent hawala transactions. according to a senior ed official, there is a steep decline in hawala transactions in the city. he attributed this healthy development to the legal transfer of money. "the hawala operations are no more lucrative due to reduction in margin money. till 1997, the main operators used to get at least 20 per cent on each transaction. but now the profit margin has shrunk to just four per cent," he said. according to conservative estimates, there are about 20,000 hyderabadis working in the gulf and other countries. they used to channel their earnings and send money home through the gulf-based hawala operators. but now most of them are sending money home through legal means. during the last six months, only two cases of hawala transactions came to the notice of the enforcement directorate. in both cases, the transactions were negligible when compared to earlier ones. according to sources, in one case the accused did a transaction of nearly rs 85 lakh over a period of one year, while in the second case the transaction was just to the tune of rs five lakh.