Govt moves to lower cost of remittance sending further

The government has moved to reduce further the cost of transferring remittance from abroad, sources said.
The ministry of finance (MoF) recently asked the central bank to inform it about the steps now in force for reducing the remittance-sending cost, they added.
The issue came up at a recent meeting of the cabinet committee on 'capacity development, manpower, and remittance' chaired by finance minister AMA Muhith.
Sources said the meeting was told that the cost of sending remittance was still high and there were enough scopes to bring it down.
It was also told that the high cost of sending remittance discourages people from using the formal channel, and thus they opt for using illegal ways.
The meeting discussed what further steps could be taken to reduce the cost to help the remitters who send 'small amounts' of money from abroad.     
Deputy Governor of Bangladesh Bank (BB) Nazneen Sultana, who attended the meeting, told the FE that the finance minister has appreciated the steps taken so far to reduce the cost.
She said Bangladesh has arrangement with over 1,000 remittance channeling organisations. Besides, 31 Bangladeshi exchange  houses are operating globally to transfer remittance. Ms Sultana said as a good number of organsiations were engaged in transferring money from abroad, the stiff competition has helped reduce the cost.    
"But we are still examining how the cost can be lowered further to encourage transferring more volumes of remittance through banking channel," she said.
She added a comparative study would be carried out to check how the cost can be reduced further.  
The BB Deputy Governor said steps were being taken to help the remittance amount reach its designated receivers' doors. The mobile banking system has helped a lot in this connection, she added. Besides, 27 microfinance institutions, and outlets of Singer Bangladesh are engaged in operating remittance channels in rural areas.  
The central bank's executive director M Ahsanullah told the FE that the permission for remittance transferring to Bangladesh had been given to a lot of organisations to raise competitiveness, which has helped reduce the cost. He said there was no statistics on what percentage of money, on an average, was being spent as transfer costs for remittance. "We will have to carry out a study in this connection," he added."In a competitive market, people go to those originations which can provide good services at lower costs. In this case, the remittance senders will go to those entities, which charge lesser commission," Mr Ahsanullah said.
Until August, 2013, wage earners sent US$ 9.303 billion as remittance to the country, up from $9.154 billion until August 2012 and $8.217 billion until August 2011.