While export earnings from the readymade garments (RMG) put the urban Bangladesh on an escalator towards reaching the middle income status, the remittance money injected in the rural Bangladesh is making sure that the escalator stands on a firm structural skeleton, not on bubble.
Most importantly, this remittance money is elevating a huge portion of rural population from its subsistent state and giving them the taste of a ‘near-standard’ life with increased purchase capacity.
Thanks to our migrant workers who have left their near and dear ones and take the jobs of construction workers, cleaners, plumbers, minicab drivers, cooks, helping hands and many other professions to send back home monthly packets of money-tiny sums by developed country’s standards,-but life transforming for a rural Bangladeshi family.
Bangladesh Bank recently planned to give remittance award to the highest remittance senders and the highest remittance receiving institutions for encouraging Non Residence Bangladeshis (NRBs) to send money through legal channels. This award will be handed over at a function to be held on September 19 at Bangla Academy in the city.
Many government high ups will be there at this program and the Finance Minister AMA Muhith will hand over the awards to a total of 35 awardees, including remitters, exchange houses, bond investors and banks.
Why the initiative?
This is obviously a good initiative from the central bank. The remittance inflow in the last fiscal of 2016-17 through legal channels was the lowest in the last five years. It dropped to $12.76 billion in the last fiscal year from $14.93 billion the previous year, marking a 14.48% decline year-on-year.
Although the central bank had expected the inflow to increase in June due to Eid-ul-Fitr, the figure declined by 17%, year-on-year – in June, the country received $1.21 billion from the expatriates compared to $1.46 billion a year ago.
Experts said the strong value of taka against dollar, the decline in oil prices in the global market, income fall of expatriates working in the Middle East and use of illegal channels to remit money were major reasons behind the fall in the inflow.
They said most of our remittances come from the Middle East where the job markets have been hit by the declining oil prices. Many of the Bangladeshi expatriates there have either lost their jobs, or their earnings have reduced. All these things have affected the remittance inflow.
Experts also said remittance through illegal channels like “digital hundi” was another reason behind the fall in remittance. BB has taken several steps to increase the inflow. On March 13, the central bank sent two expert teams to Saudi Arabia, Malaysia and Singapore to see why the remittance was on the downward trend.
They found many expatriates living those countries sending money home using mobile financial services (MFS) like bKash and Rocket, which, the officials said, are illegal channels known as “digital hundi.”
Following the visits, the Bangladesh Bank came up with a number of efforts in monitoring the MFS, including capping the transaction ceiling so money cannot be sent through those channels. The central bank also asked the banks to take measures to improve the quality of remittance services so that the non-resident Bangladeshis can send their hard-earned money home through legal channels.
Moreover, the banks have been instructed to open help desks at each branch to ensure better remittance service.
Award will work as a booster
As a part of the central bank’s initiative to increase the remittance through legal channels, the BB will give the ‘Bangladesh Bank Remittance Award-2016’ under five categories to expedite the inflow of remittance.” The categories are skilled remitter, unskilled remitter, bond investor NRB, exchange house owner NRB and the highest remittance receiver bank.
A total of 35 awardees, including remitters, exchange houses, bond investors and banks, will receive the award. Out of 35 awardees, five banks will get the award this year. “The overall situation has improved as BB has taken some measures to streamline the legal channel for encouraging Non-Resident Bangladeshis (NRBs) to send home money,” said Bangladesh Bank (BB’s) Deputy Governor Abu Hena Mohammad Razee Hassan.
Hassan said, Bangladeshis living abroad send money back home through wire transfers that can be tracked but they also send money unofficially through parcels in the mail or deliver it personally on visits to the family.
“We want to bring those informal channels under legal supervision. I believe this award will work as in impetus for that.” ■