The “other” banking system – the arrests yesterday highlighted the banking system used by the Islamic culture to engage in international commerce but keeping the money out of the “real” banking system (and hidden from taxing authorities and people tracking drug money, etc…). This system is called Hawala or Hundi.
I remember reading about this in Insight magazine back in the early 1990s – it’s a very well organized and very old global system where value is transferred around the world – without an actual transfer of money – through a network of “under the radar” communications methods – a person in Pakistan can give money to his local “banker” and then his acquantance in the United States goes to his local “banker” and picks up the cash. That’s basically what the people who were arrested yesterday do for a living.
The Knights Templar had the same operation awhile back.
It goes back 3000 years to the Phoenicians. If you look at the businesses that deal mostly in cash, more than likely Hawala is close by. A couple years ago, the Yellow Cabs in New York (mostly driven by Pakistanis and Somalis) went on strike to avoid having wireless CC machines put into the cabs that allowed riders to pay without cash and for the cab owners to see the GPS of where the cab went without logging a fare
http://www.nyc.gov/html/tlc/downloads/pdf/srv_enhan_rfp.pdf