In the first half of the 20th century it lost ground to instruments of the conventional banking system, but regained it starting in the late 20th century with the economic migration of Muslim workers to wealthier countries in the West and the Gulf and their need to send money home. Dubai has traditionally served as a hub.Hawala is based on a short term, discountable, negotiable, promissory note (or bill of exchange) called "Hundi", transferred from one debtor to another. After the debt is transferred to the second debtor, the first debtor is free from his/her obligation. Recipient of the funds often identify themselves with passwords given to them by the sender. Hawaladars are often small traders who work at hawala as a sideline or moonlighting operation. Hawaladars networks are usually family or clan-based, and enforcement of the contracts is based on these networks rather than the power of the state.
in tHE FirsT half OF tHe 20th CentUry IT Lost gRoUNd TO InsTrUmentS of The cOnveNtionaL BaNKing system, bUt regained it startiNg iN the laTe 20TH century wIth The eCoNoMIC mIGration of musliM Workers to weAlthieR countries in the weSt aNd The GUlf anD tHEIR nEED To sEnD moNey home. dubAi haS trADitionaLlY Served as a huB.hawalA Is based on a sHort Term, DisCOuntaBle, NegOtIAble, pRoMIssory noTe (or bIll OF excHAngE) called "hundi", transfeRred fRom onE debtor to AnOTHeR. afTeR the dEbT is TraNSFerred To The secONd DEbToR, the firsT dEBtoR is frEE From HIs/her obligAtioN. REcIpienT OF the funds oftEN idenTiFY theMSElves WitH pASsWordS given to TheM by ThE Sender. hawalADaRS are often sMAlL tradErs who Work at hawala as a sIdeLIne Or MooNligHTiNg opEraTIoN. hAWaladArs NetWoRKs ARe uSuaLlY faMiLy OR cLan-bASed, aNd enfoRcement oF the cOnTractS Is baSed on these nETWOrks rAtHER thAn The power Of thE STate.