In the face of declining remittance inflow, the Prime Minister's Office (PMO) has asked the authorities concerned to expedite the process of turning Probashi Kallyan Bank (PKB) into a scheduled bank. This is a strategy to widen formal channels and revamp remittance inflow, officials said.
The directive came as the remittance inflow experienced a sharp fall to US$5.21 billion during the July-November period of the current fiscal year against $6.17 billion in the same period of the previous fiscal.
Officials said Prime Minister Sheikh Hasina recently asked the ministries concerned to take steps for bringing remittance through PKB in addition to existing channels to help increase the inflow.
Policymakers expressed concern over the situation as Bangladeshi nationals have secured higher number of overseas employment in 2016 as compared to last year, in one hand, and the remittance inflow continued to decline, on the other.
Data shows that some 0.7 million jobseekers went abroad till November 2016 as compared to 0.558 million in the whole year of 2015.
Officials said the World Bank's October 2016 issue of 'The Bangladesh Development Update' was placed before the Prime Minister recently and she went through the report. She wanted to know the reasons behind the decline in remittance inflow, they added.
In response, the ministry of expatriates' welfare and overseas employment (MEWOE) placed a report citing the reasons.
Later, the Prime Minister asked the officials concerned to take steps for bringing remittance through PKB and making the Bangladesh missions aboard more active to revamp the inward remittance flow.
Sources said the government functionaries have found that the expatriates have become dependent more on using the informal channels, widely known as hundi, of sending money home, and avoiding the formal channels. The remitters were getting higher exchange rate in the illegal channels.
The PKB as a non-scheduled bank cannot perform all the functions of a scheduled bank. To bring remittance through its channel, officials said, the PKB has to be turned into a scheduled bank.
The MEWOE convened on Tuesday an inter-ministerial meeting to discuss the issue of turning the PKB into a scheduled one.
Representatives from Bangladesh Bank, finance division, bank and financial institutions division, foreign ministry and some state-owned banks attended the meeting.
They viewed that the PKB could play a vital role in revamping remittance inflow once it starts working in this field. They were infavour of taking steps to make the bank scheduled.
When contacted, PKB managing director Wahiduzzaman Khandaker told the FE that the bank needs to raise its paid-up capital to Tk 4.0 billion for turning it into a scheduled bank.
He said another meeting will be held next week at the bank and financial institutions division to decide who would pay the money to meet the capital requirement - the finance ministry or the expatriate welfare ministry.
"Once the decision is taken, the PKB will be turned into a scheduled bank and start working for bringing remittance," said Mr Khandaker.
The PKB was established in 2010 to provide collateral-free loans to workers going abroad for employment, provide loan to returnees to help them being employed within the country, facilitate sending remittance and encourage the wage-earners to invest in the country.
The bank has 54 branches across the country and one booth at Hazrat Shajalal International Airport. It accepts deposits, extends loans to the migrants and returnees, and buys and sells foreign currencies. Up to November 2016, the PKB sanctioned loans worth Tk 890 million.
syful-islam@outlook.com
