Delivery of remittances by post offices starts tomorrow
Mahmuda Shaolin | Saturday, 12 July 2008
The Bangladesh Post Office (BPO) will start from tomorrow (Sunday) the delivery of remittances transferred through a US company, to recipients across the country.
In January, the postal department signed a ground-breaking agreement with the global money transfer leader, Western Union, as part of 'major reforms' that aims to lift the ailing state organisation at a break-even level by late 2009.
Under the deal, 450 post-offices across the country will start the delivery of money transferred by the Western Union. The department will gradually involve 7,000 post offices in the service.
"It's a ground-breaking deal for us. It will go a long way in making the postal department financially viable," BPO director general Mobassher ur Rahman told the FE Wednesday.
"The Western Union has given us computers, fax machines and training to our postmen. We hope it will make money transfer easier for millions of Bangladeshis living and working abroad," he said.
The post office will get 25 per cent of the commission received by the Western Union from remitters for a money transfer, BPO chief said adding that in the first year, it expects to earn revenue worth at least Tk 50 million.
The new deal takes Western Union deep into the countryside, where the banks do not have branches but the postal department does.
The BPO is one of the largest public sector employers, with a 40,000-strong staff working in over 10,000 post offices spread to every nook and corner of the country.
The American company, with its presence in more than 200 countries, has been pursuing the agreement with the postal department for years, after it signed similar deals in India and Pakistan.
Early this year, the company opened its 50,000th agent in India. The company's money transfer business in India increased by about 69 per cent alone in 2006-07 and it plans to double the number in two years.
In Bangladesh, however, the expansion was slow because the multinational giant only transferred the remitted money through several small private banks.
"The latest deal will make the Western Union available everywhere in the country and the expatriate Bangladeshis will find it easier to remit money to their families in any area," said one company official on condition of anonymity.
"It will be an epoch-making event for the country's post offices, as they will get a sizable share of our revenue," the official added.
The BPO chief said the deal with the Western Union is part of 'huge reforms' to make the department, one of the oldest government offices in the Indian Sub-continent, profitable.
Early this year, the BPO also signed deals with two global financial behemoths, Citibank and Standard Chartered, and country's private commercial bank (PCBs) to deliver their remittances across the country in exchange for annual fees.
Officials said the search for alternative income sources follows the gradual poaching of postal services by the private courier companies and the mobile phones.
"We no longer dominate the money transfer or letter posting services to the cities in the country," the DG of post office said.
The department, heavily subsidised by the government, incurred a loss of over Tk 1.25 billion last year.
The cash-starved BPO is seeking new avenues to be break-even by late 2009.
As part of the plan, the government has already raised the postal tariff by 50-150 per cent, for the first time in over 17 years, to cut the losses. But officials said the increase will fetch only Tk 250 million in additional revenue.
More than five million Bangladeshis are now living abroad, mostly in the Middle East. Last year they remitted US$6.56 billion, bulk of which was transferred through banks.
In January, the postal department signed a ground-breaking agreement with the global money transfer leader, Western Union, as part of 'major reforms' that aims to lift the ailing state organisation at a break-even level by late 2009.
Under the deal, 450 post-offices across the country will start the delivery of money transferred by the Western Union. The department will gradually involve 7,000 post offices in the service.
"It's a ground-breaking deal for us. It will go a long way in making the postal department financially viable," BPO director general Mobassher ur Rahman told the FE Wednesday.
"The Western Union has given us computers, fax machines and training to our postmen. We hope it will make money transfer easier for millions of Bangladeshis living and working abroad," he said.
The post office will get 25 per cent of the commission received by the Western Union from remitters for a money transfer, BPO chief said adding that in the first year, it expects to earn revenue worth at least Tk 50 million.
The new deal takes Western Union deep into the countryside, where the banks do not have branches but the postal department does.
The BPO is one of the largest public sector employers, with a 40,000-strong staff working in over 10,000 post offices spread to every nook and corner of the country.
The American company, with its presence in more than 200 countries, has been pursuing the agreement with the postal department for years, after it signed similar deals in India and Pakistan.
Early this year, the company opened its 50,000th agent in India. The company's money transfer business in India increased by about 69 per cent alone in 2006-07 and it plans to double the number in two years.
In Bangladesh, however, the expansion was slow because the multinational giant only transferred the remitted money through several small private banks.
"The latest deal will make the Western Union available everywhere in the country and the expatriate Bangladeshis will find it easier to remit money to their families in any area," said one company official on condition of anonymity.
"It will be an epoch-making event for the country's post offices, as they will get a sizable share of our revenue," the official added.
The BPO chief said the deal with the Western Union is part of 'huge reforms' to make the department, one of the oldest government offices in the Indian Sub-continent, profitable.
Early this year, the BPO also signed deals with two global financial behemoths, Citibank and Standard Chartered, and country's private commercial bank (PCBs) to deliver their remittances across the country in exchange for annual fees.
Officials said the search for alternative income sources follows the gradual poaching of postal services by the private courier companies and the mobile phones.
"We no longer dominate the money transfer or letter posting services to the cities in the country," the DG of post office said.
The department, heavily subsidised by the government, incurred a loss of over Tk 1.25 billion last year.
The cash-starved BPO is seeking new avenues to be break-even by late 2009.
As part of the plan, the government has already raised the postal tariff by 50-150 per cent, for the first time in over 17 years, to cut the losses. But officials said the increase will fetch only Tk 250 million in additional revenue.
More than five million Bangladeshis are now living abroad, mostly in the Middle East. Last year they remitted US$6.56 billion, bulk of which was transferred through banks.