Q1 remittance flow climbs 48pc on incentives offer

The inflow of remittances grew by more than 48 per cent in the first quarter (Q1) of this fiscal year (FY) despite the ongoing Covid-19 pandemic, officials said.
The flow of inward remittances rose to US$6.71 billion during the July-September period of FY 2020-21 from $4.52 billion in the same period of the previous fiscal, according to the central bank's latest statistics.
The money sent home by Bangladeshis working abroad amounted to $2.15 billion in September 2020, up by $187 million from the previous month's level.
In August last, the remittances stood at $ 1.96 billion. It was $1.48 billion in September 2019.
"We expect that the upward trend of inward remittance will continue in the coming months as the government has continuously provided 2.0 per cent incentive on remittance receipts," Kazi Sayedur Rahman, executive director of the Bangladesh Bank (BB), told the FE.
He also said the BB's policy support also contributed to such a higher growth in inward remittances during the period under review.
The central bank has already relaxed the conditions for incentives on the money sent by expatriate Bangladeshis to shore up the sinking flow of remittances amid the pandemic.
Under the latest relaxations, the expatriate Bangladeshis can get 2.0 per cent incentives without showing any paper for incentives on remittance up to $5,000 or Tk 500,000. Earlier, the ceiling was Tk 150,000.
Besides, those sending more than Tk 500,000 will have two months to submit the papers instead of 15 days earlier.
The expatriates who have already sent money will also get the facilities. These will be effective until December 31, 2020.
"Stable exchange rate of the local currency against the US dollar has also helped increase the inflow of remittances," the central banker noted.
Talking to the FE, Md. Ali Hossain Prodhania, managing director of Bangladesh Krishi Bank (BKB), said competitive attitude of the banks also helped receive the higher inward remittances during the period under review.
The government's incentive also helped discourage sending money using illegal channels, Abu Reza Mohd. Yeahia, deputy managing director of Islami Bank Bangladesh Limited (IBBL), said.
"We're trying to sign more deals with overseas exchange houses to expedite the inflow of remittances in the near future," the senior banker noted.
He also said most of the banks already expedited disbursement of remittances to the beneficiaries using their agent banking outlets across the country.
Currently, 29 exchange houses are operating across the globe, setting up more than 1312 drawing arrangements abroad, to expedite the remittance inflow, another BB official said.
The central bank of Bangladesh earlier took a series of measures to encourage the expatriate Bangladeshis to send their hard-earned money through the formal banking channel, instead of the illegal "hundi" system to help boost the country's foreign exchange reserve.
The country's foreign exchange (forex) reserve rose to $39.47 billion on Thursday from $39.31 billion of the previous working day.
The World Bank and the Asian Development Bank (ADB) predicted that the flow of inward remittance might drop significantly this year because of the ongoing pandemic.
The central bank, however, has projected that the flow of inward remittance might grow by nearly 3.0 per cent to $18.75 billion in FY '21 from $18.20 billion of the previous fiscal, according to the latest monetary policy statement (MPS).

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