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Move on for cost-free remittance by expats

FE Report | January 07, 2019 00:00:00

A move is under way to facilitate sending of money back home free of cost by the Bangladeshi migrant workers.

The Ministry of Finance (MoF) has prepared a concept paper on the issue.

The government, not the migrant workers, will bear the cost involved in sending money to family members back home.

"We're working on the matter which is still in its initial stage," an official at the finance division told the FE.

He said the move has been taken to raise inward remittance as they believe this will help encourage remitters to send money through formal channels instead of informal ones, including "hundi".

Appropriate official measures are needed to be taken as remitting money from abroad has become very easy following the roll-out of mobile financial services, the official argued.

"We've now no option but to pay from the state coffer the fees paid by Bangladeshi expatriates for remitting their money."

It is estimated that Tk 5.0-7.0 billion annually may be required to bear the cost of remittance transfer.

Under the move, the government may be required to allocate the amount in its annual national budget.

A senior official at the division told the FE that the move was actually undertaken by the immediate-past finance minister, AMA Muhith.

"We may now need further instruction from the new finance minister, AHM Mostafa Kamal, who is expected to take oath of office today (Monday)."

Finance division officials said they have already held a meeting to expedite the matter and that further discussion with stakeholders will take place shortly.

The government made the move first in 2016 at a time when remittance inflow fell significantly on the back of fall of international oil prices.

At that time, Mr Muhith said remittance inflow had dropped in 2016 as the income of the expatriates fell in the Middle-Eastern countries that year.

However, remittance has rebounded in recent months, hitting at $15.53 billion in the year 2018.

Remittance jumped by nearly 15 per cent or around $2.0 billion in the 2018 calendar year, thanks to the depreciation of local currency against dollar.

People familiar with the development said remittance inflows rose despite a falling trend in outbound jobs of Bangladeshis.

An estimated 10 million Bangladeshi workers are employed in different countries and they remit $15 billion, on an average, every year to help boost the foreign currency reserve.

The country's economy is believed to be vibrant because of the remittances and export receipts.

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