Expatriates still prefer to remit money thru' informal channels
Sunday, 16 November 2008
FE Report
A large number of expatriate Bangladeshis still prefer to remit home their money through informal channels as they face tremendous problem sending their earnings through formal channels, said discussants at a seminar on Saturday.
"Around 46 per cent of the total volume of remittances have been channelled through official sources, around 40 per cent through Hundi, 4.6 per cent through friends and relatives and eight per cent were hand carried by migrant workers," AKM Shameem, senior executive vice president of Mutual Trust Bank Ltd, said at the seminar of the Bangladesh Economic Association (BEA) in the city on the day.
He said banks are not helpful in reaching the remitted money of the expatriate workers/ professionals. In most cases, the banks take unnecessary time to hand over money to the relations of the remitter or credit the money to the respective accounts.
"It is also alleged that the beneficiaries have to pay speed money to receive remittances. Theses things happen particularly in government-owned banks," he said while presenting a paper on 'Can We Do More for the Expatriates?……Remittance Scenario of Bangladesh.'
Presenting another paper on 'Economics of Migrant Remittances', Jamaluddin Ahmed, a partner of Hoda Vasi and Chowdhury & Co, chartered accountants, said it is very important to use remittances in productive investment by creation of an enabling environment to invest the money of expatriates in capital market.
He, however, stressed the need for reviewing foreign exchange guidelines and developing new remittances corridor.
"Remittances have a significant impact on the exchange rate in the medium term. At the same time remitters respond to the change in the exchange rate as well as other price variables like interest rates. Thus, the remitters tend to send more money (in terms of US dollars), when there is devaluation of currencies in their countries," he added.
Speaking at the seminar, Bangladesh Association of International Recruiting Agencies (BAIRA) President Golam Mostafa said some workers are forced to send home their money through informal channels due to a number of legal barriers also. But the scenario is gradually changing as a result of awareness campaigns, he added.
Narrating the sufferings of the expatriate Bangladeshis, he said the government should take measures to encourage them to send home more money.
Echoing a similar view, Qazi Kholiquzzaman Ahmad, chairman of the BEA, who presided over the seminar, said Bangladesh missions abroad should take up the interest of the workers.
"We must also take care that the money remitted by the workers are utilised in productive sectors in the country," the noted economist added.
Abul Barakat, general secretary of the BEA, said the amount of remittances, the country received in the last fiscal year, could be doubled, if the whole of money would have come through formal channels.
In the last fiscal year, the country received remittances worth over $7.914 billion from around 5.6 million Bangladeshis living and working abroad.
"We don't need to depend on aid of the World Bank, the International Monetary Fund and others if the government can boost inflow of remittances," the noted economist added.
He further said the contribution of the remittances, if counted with export earnings, will be equivalent to around 60 per cent of the total export earnings in a year.
A large number of expatriate Bangladeshis still prefer to remit home their money through informal channels as they face tremendous problem sending their earnings through formal channels, said discussants at a seminar on Saturday.
"Around 46 per cent of the total volume of remittances have been channelled through official sources, around 40 per cent through Hundi, 4.6 per cent through friends and relatives and eight per cent were hand carried by migrant workers," AKM Shameem, senior executive vice president of Mutual Trust Bank Ltd, said at the seminar of the Bangladesh Economic Association (BEA) in the city on the day.
He said banks are not helpful in reaching the remitted money of the expatriate workers/ professionals. In most cases, the banks take unnecessary time to hand over money to the relations of the remitter or credit the money to the respective accounts.
"It is also alleged that the beneficiaries have to pay speed money to receive remittances. Theses things happen particularly in government-owned banks," he said while presenting a paper on 'Can We Do More for the Expatriates?……Remittance Scenario of Bangladesh.'
Presenting another paper on 'Economics of Migrant Remittances', Jamaluddin Ahmed, a partner of Hoda Vasi and Chowdhury & Co, chartered accountants, said it is very important to use remittances in productive investment by creation of an enabling environment to invest the money of expatriates in capital market.
He, however, stressed the need for reviewing foreign exchange guidelines and developing new remittances corridor.
"Remittances have a significant impact on the exchange rate in the medium term. At the same time remitters respond to the change in the exchange rate as well as other price variables like interest rates. Thus, the remitters tend to send more money (in terms of US dollars), when there is devaluation of currencies in their countries," he added.
Speaking at the seminar, Bangladesh Association of International Recruiting Agencies (BAIRA) President Golam Mostafa said some workers are forced to send home their money through informal channels due to a number of legal barriers also. But the scenario is gradually changing as a result of awareness campaigns, he added.
Narrating the sufferings of the expatriate Bangladeshis, he said the government should take measures to encourage them to send home more money.
Echoing a similar view, Qazi Kholiquzzaman Ahmad, chairman of the BEA, who presided over the seminar, said Bangladesh missions abroad should take up the interest of the workers.
"We must also take care that the money remitted by the workers are utilised in productive sectors in the country," the noted economist added.
Abul Barakat, general secretary of the BEA, said the amount of remittances, the country received in the last fiscal year, could be doubled, if the whole of money would have come through formal channels.
In the last fiscal year, the country received remittances worth over $7.914 billion from around 5.6 million Bangladeshis living and working abroad.
"We don't need to depend on aid of the World Bank, the International Monetary Fund and others if the government can boost inflow of remittances," the noted economist added.
He further said the contribution of the remittances, if counted with export earnings, will be equivalent to around 60 per cent of the total export earnings in a year.