The inflow of foreign remittance continued to register robust growth since the end of the ousted Sheikh Hasina's government, thanks to gradually improving governance in the banking system that is considered to have rebuilt remitters' confidence in the formal channel.
In the just ended month (October), expatriate Bangladeshis sent home $2.39 billion, registering the same robust level of the previous month's (September) $2.4 billion, according to Bangladesh Bank data revealed on Sunday.
The inflow showed this uptrend since the first month of this fiscal year (FY 2024-25) as the central bank recorded receipts of $1.91 billion in July and $2.22 billion in August.
The October 2024 inflow showed 21 per cent growth from $1.97 billion of the same month last year.
Dr. M. Masrur Reaz, Chairman of the Policy Exchange of Bangladesh, said a sense of confidence has grown among expatriates due to the measures taken by the interim government to enhance governance in the banking system.
"In my view, the steps taken by the authorities concerned to improve banking governance have significantly contributed to the recent increase in remittances," he told The Financial Express.
Of October 2024 inflow, $726.1 million came through state-owned commercial banks, around $120 million through Bangladesh Krishi Bank, $1.54 billion through local private commercial banks, and $7.17 million through nine foreign banks.
However, no remittance was processed in October by nine banks, including state-owned Bangladesh Development Bank Limited (BDBL) and specialised Rajshahi Agricultural Development Bank (RAKUB).
The private banks in this category were Community Bank, Citizens Bank, ICB Islamic Bank, and Padma Bank, while foreign banks were Habib Bank, National Bank of Pakistan, and State Bank of India.
Dr. Masrur said expatriates are motivated by a sense of nationalism to contribute to building a "new Bangladesh," which has led to increased remittance volume.
He also pointed to the end of "grey practices" associated with S Alam Group-owned banks as a factor in the recent surge.
"Banks associated with S Alam were involved in grey-market banking practices, capturing dollars and other foreign exchange through informal channels. With that ending, expatriates now feel more confident," he noted.
Commenting on the ongoing dynamism in remittance inflows, Dr. M. A. Razzaque, Chairman of the Research and Policy Integration for Development (RAPID) said: "In my view, this is largely due to subdued demand for foreign goods and services through informal channels,"
Capital flight through hundi (informal networks) has also declined significantly since the end of the Awami League regime, he noted.
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