South Asia has been plagued by Islamic terrorism for decades. An increasingly hostile political environment and the prolonged conflict in Afghanistan, Pakistan and Jammu & Kashmir has enabled terror organisations to thrive because of the complicity of governments and corruption. The tenacious endurance of such terror groups would not be possible without financial systems. Money is described as ‘the lifeblood’ of terrorist organisations. As terrorism becomes an enduring feature of modern life there is an increasing need to examine the ‘New Economy of Terror’. Rooted in globalisation the terror groups exploit all forms of financial systems as they engage in legal and illegal activities. South Asian terror groups sustain themselves financially by relying on state-sponsorship, extortion, kidnapping, drug trafficking, smuggling networks, and charities. The emergence of the terror-crime nexus in South Asia and the collaboration of certain groups such as the Taliban, Al-Qaeda and Lashkar-e-Taiba with each other and with criminal syndicates creates terrorist networks which aid and abet each other, either financially or logistically - thus, amplifying the terrorist threat in South Asia.