Home Bank & Finance Remittance houses under pressure from Hundi
Bank & Finance - April 29, 2024

Remittance houses under pressure from Hundi

Md Razib Mridha from KL: Malaysia is a country of workers, students, employees, traders and various professions. In all, about 15 lakh expatriate Bangladeshis live here. A large part of them need to send money to and from the country almost every day. As such, the amount of money brought and sent from Malaysia to Bangladesh is not less.
The remittance houses located in the country say that expatriates have sent remittances of $12.23 million from Malaysia through legitimate channels in March this year.
In spite of that fact, the officials of the remittance houses felt that the amount of remittances sent is less compared to the expatriates staying in this huge Bangladeshi-dominated Malaysia. Meanwhile, in addition to the remittance houses, they are organizing campaign meetings in different provinces of Malaysia with the joint initiative of the High Commission for the purpose of sending remittances legally. Besides, to increase the flow of remittances, 5 percent incentive is being given by the government for sending money through government banks. However, they say that they are not getting the expected results.
The economic picture of the last few months shows that Malaysia ranks 5th among the countries receiving remittances from 30 countries in the world, but they are struggling to maintain that trend despite increasing government incentives. As a result, the remittance houses have become disoriented under the influence of Hundi.
The pandemic of the past few years and the recent Europe-Middle East war have left the hundi in a tizzy against the official currency amid the ringgit’s fall against the dollar due to instability in the global economy and the lack of legal action against hundi traders.
While ordinary expatriates get 5 percent if they send money through banks, they get higher rates if they send money through Hundi. According to the calculations of recent hundi traders, if you send money to hundi, you get Tk 5/6 more per dollar, as a result, ordinary expatriates are leaning towards hundi for two taka more.
A Malaysian expatriate who did not want to be named said, we earn money with difficulty. If we send money to the bank we get less money, we have to pay a separate fee for sending again.
On that bank is far away, it takes a lot of trouble. Fear of the police on the way. So, we send money easily from the job site. And money is more available in hundi, and trouble is less.
In the last few decades, the opposite picture is prevailing in our country. Where Malaysians used to go to our country to get degrees from Malaysia, the current in the education sector is going in the opposite direction. Now many students from our country come to study in Malaysia to get their degree. In that case too, there are complications in payment of admission and tuition fees. They regretted that they have to pay tuition fees here. He has to bring money from the country. Opening of student files in banks from Bangladesh is stopped, so they are forced to bring money in hundi. Universities benefit from the hundi as the local currency rate is lower in taka than the dollar rate.
Meanwhile, the businessmen here say that there is no legal channel to bring money from the country, and the hundi traders are in dire straits. They said that many Bangladeshis are opening companies and running business here. Regularly they need Ringgit for business here. We do not have much opportunity to legally bring foreign investment money from Bangladesh. Many are even taking up second-homes in Malaysia and those who are becoming permanent residents have to invest large sums of money here, most of which is coming through these hundis.
Besides, most of the huge amount of money of millions of workers is coming through this hundi to pay the fees to the agents in the ongoing manpower business. Garment materials from the country come here legally, but money is traded through this hundi, which eats up the country’s economy.
Meanwhile, in Malaysia, there is a year-round operation to catch illegal immigrants. Many are still systematically living illegally. Those who do not have valid visas, even if they want to, do not dare to go out to send money legally for fear of being caught. As a result, the hundiwalas are coming to their rooms and doing hundi transactions easily.
Talking to Sultan Ahmed, Chief Executive Officer and Director of Agrani Remittance House Sdn Bhd, regarding Hundi, he said that the remittance flow is decreasing in April compared to March this year despite the last Ramadan and Eid months due to the difference between Hundi and banking channels.
Apart from that, remittances are decreasing due to the fall in the value of ringgit against the current dollar and the decline in the value of taka against the ringgit, according to the chief executive officer of NBL Money Transfer Malaysia, Md Ali Haider Mortuza. He said that expatriates sent remittances of 2 crore 1.2 lakh dollars to the country from NBL money transfer from National Bank in March, but even though this month (the month of Eid) the remittances are less than last month.
Placid Money Exchange executive officer Noor-e-Alam Siddiqui said that efforts are being made to overcome the disaster that has occurred in the remittance sector. However, at the moment Bangladeshi expatriates should be given more incentives against remittances sent through legitimate channels. Increasing incentives will encourage expatriates to send remittances through legitimate channels.
An expatriate, who does not want to be named, said without revealing that more money is available through hundi than incentives. Illegal ways like visa trading, under-invoicing (under-invoicing) have also started again here. Hundi is increasing now.
Malaysian expatriates say there is no alternative to effective action to stop sending remittances through informal channels. In this regard, the Ministry of Labor and Expatriate Welfare and the Ministry of Foreign Affairs need to increase communication with expatriates. Their service quality also needs to be improved. Security and facilities of expatriates also need to be looked into.
Apart from this, we have to take effective measures to overcome the foreign exchange crisis. It is not enough to discuss only conventional constraints. Must be self-motivated in science-based discussion, approach and implementation. It should be remembered that people are patriotic for their own sake and traitors for their own sake. If the parents are not strict, like when the children are naughty, sometimes they have to be strict to bring them on the right path. In order to bring the country’s economy to the brink, laws must be properly formulated and implemented for all.
Also, a task force consisting of appropriate persons should be formed and an integrated short-term, medium-term and long-term strategy should be decided and implemented with well-considered input from them. Apart from this, the bank account number of the expatriate should be linked with the passport number so that the government can be sure whether the particular person has sent the money through the legitimate channel or not. And if the banks also contact their nominees every month to confirm whether they have withdrawn foreign currency or not, economic experts believe that it is possible to suppress the hundi.

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