KSA, Jul 26, (Arab News): Expatriates are remitting billions of riyals through illegal money transfer operators in the Kingdom.

Banking and financial experts have called on government to take action because of the danger this illegal market poses to the economy. One expert estimates that SR300 billion would be transferred out of the country by the year-end.

Also known as “moving banks,” these operators set up offices with clothing stores as fronts in poor neighborhoods in the country.
Banking expert Fadl Abu Ainain said poor regulatory controls have seen this businesses mushroom in the country. The unlicensed money transfer brokers operate like real banks with services including taking deposits, transferring funds, making investments and providing loans, he said.

The dealers have a network of people working for them in all cities in their home countries and provide door-to-door services, the report said.

Abu Ainain said these illegal dealers threaten security because they could be involved in drug smuggling, human trafficking, money laundering and terror financing.

The ministries of commerce and labor also have a role to play to tackle cover-up businesses and deal with the huge numbers of foreigners in the country, it was reported in the local media.

He suggested the government form a specialized team consisting of various government departments to deal with the problem. The government should also strengthen relations with regulatory, security and financial bodies in countries receiving these irregular money transfers.

Meanwhile, another economic expert, who wanted to remain anonymous, said that the illegal transfer market would hit SR 300 billion this year.