DRI to Investigate Hundi
DRI is not our famous Directorate of Revenue Intelligence but Nepal's Department of Revenue Investigation. According to Nepal's DRI DG, Shanta Bahadur Shrestha, misappropriation of foreign currency and capital flight are major problems the country is facing through Hundi. Hundi has been emerging as a serious threat to national economy. Hundi is an underground banking system that allows money transfer without leaving any paper trails because there is no contract, bank statements or transaction record. It is also known as a Hawala in neighbouring India.
Hundis refer to financial instruments evolved on the Indian sub-continent used in trade and credit transactions. They were used
++ as remittance instruments (to transfer funds from one place to another),
++ as credit instruments (to borrow money [IOUs]),
++ for trade transactions (as bills of exchange).
Technically, a Hundi is an unconditional order in writing made by a person directing another to pay a certain sum of money to a person named in the order. Hundis, being a part of the informal system have no legal status and are not covered under the Negotiable Instruments Act, 1881. Though normally regarded as bills of exchange, they were more often used as equivalents of cheques issued by indigenous bankers.