Rate cut on bonds 'behind fall in remittance flow'
Thursday, 11 November 2010
Sheikh Shahariar Zaman
Expatriates' Welfare and Overseas Employment Ministry has expressed its concern over the recent fall in remittance and held some Finance Ministry decisions responsible for it.
It also expressed its worry that the decisions might discourage expatriates to send remittance through formal channel and shift to informal way (hundi).
The decisions are reducing in interest rate on different bonds offered to non-resident Bangladeshis (NRBs) and withdrawing auto renewal facility of bonds.
In a demi-official (DO) letter sent by Expatriates' Welfare Minister Khandkar Mosharraf Hossain to Finance Minister AMA Muhith, the former expressed his concern and said that the remittance inflow rate has been decreasing during the current fiscal.
"Reduction in interest rate on different bonds offered to non-resident Bangladeshis and withdrawal of auto renewal facility of bonds are the two main reasons behind the lower remittance inflow trend," the letter said.
Remittance inflow did not decrease even during the period of global recession but now it is decreasing, the letter added.
The government in the budget from current fiscal reduced the rate of wage earners development bond, US dollar bond and US dollar premium bond from 12.0% to 10.5% and withdrew the bond auto renewal facility offered to expatriates.
These bonds are very popular among expatriates as they give them good returns and work as incentive for them to send more money to the country, the letter said.
The expat minister has requested the finance minister to revisit the decisions to ensure welfare of the expatriates.
"The Finance Ministry should have consulted with us before taking the decisions," said a senior official of the Expat Welfare Ministry.
The NRBs through different channels including the diplomatic one informed the Expat Welfare Ministry that they are not happy over the decisions and they have already started to withdraw their investments in the country, he said.
Investment in wage earners' development bond decreased by about 11 per cent since July this year and many NRBs are withdrawing their money due to removal of auto renewal facility, he added.
"It is the duty of the state to look after the welfare of the expatriates who send their money, which keeps the wheel of the economy in motion," the official said.
About seven million Bangladeshis are working abroad and send remittances, which are 13 per cent of GDP, 13 times the foreign direct investment and six times foreign aid.
Expatriates sent $10.72 billion in 2009 and about 0.3 million people went abroad in January to September period of 2010.
Expatriates' Welfare and Overseas Employment Ministry has expressed its concern over the recent fall in remittance and held some Finance Ministry decisions responsible for it.
It also expressed its worry that the decisions might discourage expatriates to send remittance through formal channel and shift to informal way (hundi).
The decisions are reducing in interest rate on different bonds offered to non-resident Bangladeshis (NRBs) and withdrawing auto renewal facility of bonds.
In a demi-official (DO) letter sent by Expatriates' Welfare Minister Khandkar Mosharraf Hossain to Finance Minister AMA Muhith, the former expressed his concern and said that the remittance inflow rate has been decreasing during the current fiscal.
"Reduction in interest rate on different bonds offered to non-resident Bangladeshis and withdrawal of auto renewal facility of bonds are the two main reasons behind the lower remittance inflow trend," the letter said.
Remittance inflow did not decrease even during the period of global recession but now it is decreasing, the letter added.
The government in the budget from current fiscal reduced the rate of wage earners development bond, US dollar bond and US dollar premium bond from 12.0% to 10.5% and withdrew the bond auto renewal facility offered to expatriates.
These bonds are very popular among expatriates as they give them good returns and work as incentive for them to send more money to the country, the letter said.
The expat minister has requested the finance minister to revisit the decisions to ensure welfare of the expatriates.
"The Finance Ministry should have consulted with us before taking the decisions," said a senior official of the Expat Welfare Ministry.
The NRBs through different channels including the diplomatic one informed the Expat Welfare Ministry that they are not happy over the decisions and they have already started to withdraw their investments in the country, he said.
Investment in wage earners' development bond decreased by about 11 per cent since July this year and many NRBs are withdrawing their money due to removal of auto renewal facility, he added.
"It is the duty of the state to look after the welfare of the expatriates who send their money, which keeps the wheel of the economy in motion," the official said.
About seven million Bangladeshis are working abroad and send remittances, which are 13 per cent of GDP, 13 times the foreign direct investment and six times foreign aid.
Expatriates sent $10.72 billion in 2009 and about 0.3 million people went abroad in January to September period of 2010.