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Bangladesh - Bank & Finance - 3 weeks ago

BB recommends to increase remittance

Staff Correspondent: The government is planning to provide non-monetary incentives along with existing monetary incentives to increase remittance flow through formal channels. According to related sources, the government is going to take this initiative to bring the foreign currency earned by the expatriates to the official channels to increase the reserves of the country and the advice of the international donor organizations.
Generally, a country is required to maintain reserves equal to three months of import expenditure, sources said. There are various types of crises in the world today. A major part of Bangladesh’s
foreign exchange earnings comes from the garment export sector. After those remittances sent by Bangladeshis working in different countries. Due to complications in banking channels and distance of hundi traders, a large part of remittances is in their hands. In this situation, discussions have started on what can be done to increase the flow of remittances.
Sources said that the matter was discussed in the meeting of the Standing Committee on the Ministry of Finance of the twelfth National Parliament on April 24.
According to sources, giving non-monetary benefits to remittance senders to increase expatriate income is currently being seriously looked into. Expatriate income has been playing a very important role in the economy of Bangladesh for the past three decades. Analysis of the data of the current government from the fiscal year 2009-2010 to the fiscal year 2022-2023 shows that during that period, the total import of Bangladesh was $46.5 billion per year on an average and the average income of expatriates was $15.9 billion per year during the same period. That is, during this period, the equivalent of 34.3 percent of the average import price per year has been met with expatriate income.
The Finance Department’s Monitoring Cell has earlier made several recommendations to speed up expatriate income. This time several recommendations were made by the Banking Regulations and Policy Department of Bangladesh Bank.
Sources said that the recommendations of the banking regulations and policy department were discussed in the meeting of the parliamentary standing committee related to the finance ministry recently.
According to the recommendations of the Banking Regulations and Policy Department of Bangladesh Bank, non-financial incentive measures with the objective of increasing the flow of remittances through the formal channel can be implemented – a remittance card can be introduced in the expatriate’s own name or along with his authorized beneficiary to encourage expatriate remittances. The card can be used to provide rewards points as an incentive against remittances sent by expatriates. This benefit will be credited against remittances sent from abroad by expatriates at the applicable rate (0.5/1/2 reward points may be added against remittances of Tk 1000) as remittance card or specified bank. The remittance card will be issued against a specified bank account and the authorized beneficiary of an expatriate will receive the remittance card from the bank.
According to sources, the expatriate reward points deposited in the said card or as a bank will be redeemed by the beneficiary by going to any merchant shop contracted with the reward point bank. Reward points can be redeemed on payment of various government fees. Such as Birth Registration Fee, National Identity Card Registration/Amendment Fee, Secondary Higher Secondary Certificate Fee, Land/Flat Registration Fee, Land Rent Payment, Utility Bill Payment, Government Medical Hospital Bill Payment, Government School/College Fee Payment, Expatriate Scheme Installment. They can take advantage of reward points on payments and repayment of loan installments received from the bank.
Existing facilities can also be enhanced. For example, the number of commercially important persons (Non-Resident Bangladeshis) can be increased, housing loan facility can be increased from 75:25 debt equity ratio to 80:20, wage earnings development bond can be lifted.
The Banking Regulations and Policy Department of Bangladesh Bank believes that if the recommendations are implemented, expatriates will be encouraged to send remittances through banking channels instead of through Hundi.
Sources in the Ministry of Finance said that the recommendations sent by the Finance Department and Bangladesh Bank were discussed in the second meeting of the Standing Committee related to the Ministry of Finance recently. Necessary action will be taken as per the instructions given by the committee in this regard.

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