Hundi system has revived in Pakistan as it regained substantial share of about 30 percent of the market channelling millions of dollars from abroad to property and stocks business in the country. Both the banks and foreign currency dealers said the Hundi business is gradually picking up pace mainly because of increasing gap between the dollar rates of banks and Hundi inflows. It was also observed that Hundi system was strong in doing business from the United States and Canada.
"Sending money from the US and Canada is costlier and relatively time consuming," a banker dealing in foreign exchange said, adding that easy and less costlier Hundi system is more attractive to the Pakistanis living in the US and Canada.
The inflows from both the countries from banking channel had increased since the incident of 9/11 that resulted in tight monitoring over currency movement in and out of America. Holding a big account or sending a big money out of America means inviting investigation.
"This situation has considerably changed and monitoring has been relaxed which created space for Pakistanis to send their money through Hundi," another banker said.
"Sending over $10,000 from the US and Canada through banking channel is still difficult as it would invite investigation, while the cost of transaction is also much higher than the Hundi," they said.
Bankers have no idea that how much is the amount coming from the two countries through Hundi, but they believe that it could be around 25 percent to 30 percent more than what it was just after 9/11 incidents.
Stock market punters said that the latest high tide in the equity market was the direct result of foreign investment. "We are well aware that foreign investment has boosted the sentiment taking the market capitalisation to over $29.6 billion," a stock analyst said.
"The same money is also going towards the property a relatively safe investment for the overseas Pakistanis, but it shot up the property prices too," he said.
Exchange companies also confirmed that the Hundi system has again strengthened its root and gradually increasing its share in the market.
They said that inflows from the Middle East have also been transacted through Hundi.
"It is undocumented inflows so it is difficult to assess the volume of the business, but we can safely say that 30 percent inflows were taking place through the Hundi system," a director of an exchange company said.
He said that outflows from Pakistan were also taking place through Hundi system.
Pakistanis have sent millions of dollars for investment in Dubai-based projects and many used the Hundi channel for the purpose. In the last two years many housing projects were offered to Pakistanis on attractive terms and the money went abroad, he said.