
WB to support remittance transfer via mobile phones
Tuesday, 5 May 2009

FE Report
The World Bank (WB) will support Bangladesh's efforts to introduce remittance transfer via mobile phones, in a move to make the delivery faster and cheaper, officials said Monday.
"The bank has agreed to provide us with financial and technical support for installing the system," expatriates' welfare and overseas employment minister Khondker Mosharraf Hossain told the Financial Express.
"It's going to revolutionise the remittance delivery system. If introduced, it will enable expatriates Bangladeshi to send their hard-earned cash back home from any corner of the world," the minister said.
Mr Hossain, a former top official with the International Labour Orga nisation (ILO), said that the bank would provide necessary equipment for the system.
Officials said the global lender recognises the "huge role" of remittance in the Bangladesh economy and is keen to help popularise the use of mobile telephony for fund transfer.
Under the system, the recipient will get notified by SMS, and then will punche the code he gets on his SMS into a specially-enabled ATM (Automated Teller Machine) to withdraw the cash.
"The system will not only make the transfer process faster, but also will cut down the costs of transfer significantly," a ministry official said.
Already, Bangladesh Bank said the country's top cell phone operator GrameenPhone sought permission from the central bank to start mobile phone-based transfer.
Experts say mobile telephony-based remittance transaction will help whittle down the cost of transfer, making it as low as one per cent of the principal amount.
Currently, global money transfer agencies charge more than 20 per cent on the remitted amount-a fee considered higher in case of small amounts of money ranging from $100 to $200.
Bangladesh became the world's top 10 remittance recipient nation in the developing world in 2008, leaving behind Pakistan.
Remittance is the key economic pillar of the Bangladesh economy, denting rural poverty and stimulating domestic demand.
Last year, 6.3 million Bangladeshis and millions others who work and live abroad wired home $9.0 billion in remittance, accounting for 11 per cent of GDP or Gross Domestic Product. Record 875,000 overseas jobs in the year also helped boost the flow.
The World Bank predicted that the remittance flowing into Bangladesh could dip significantly as overseas employment slid to 38 per cent in the first quarter of 2009.
But economists and migration experts are hopeful that the flow of remittances would hit a new high of $10 billion this year, notwithstanding the worst global recession in 75 years.
Tasneem Siddiqi, an academic at Dhaka University, disagreed with the bank's projection, saying Bangladesh is still unhurt with overseas Bangladeshis sending as much as $2.5 billion in January-March period.
An average remittance size is $350, according to Western Union, top global money transfer operator.
"Use of mobile phone will help boost remittance flow thorough the official channel. It's also going to bridle transfer of remittances through unofficial hundi system," Mr Hossain added.
Meanwhile, another FE Report adds: Bangladesh Bank estimates say only 57 per cent of annual remittance flowing into Bangladesh comes through official channel, the rest finding its way into the unofficial media.
Bangladeshi expatriates sent home a record US$7.89 billion in the first 10 months of the current fiscal, marking a 22.70 per cent growth over the same period of the last fiscal.
"The flow of remittances is still at a satisfactory level despite the ongoing global economic meltdown," a senior official of the Bangladesh Bank (BB) told the FE, adding that the central bank is continuously working to increase the flow of remittances from different countries including the European Union.
"We expect that the flow of remittance may cross $9.50 billion by the end of this fiscal," the BB official said, adding that the central bank would allow more local banks to sign up drawing arrangements with overseas banks and money transfer companies.
The remittances from Bangladeshi nationals working abroad were estimated at $857.03 million in April, a fall by $28.64 million from the previous month. In March 2009, the remittance was $885.67 million, according to the BB statistics, released Monday.
The total amount of remittances dropped slightly in April over that of the previous month, maintaining previous year's trend, the BB official said quoting last year's data.
In April 2008, a total of $781 million was remitted, compared to $808 million of the pervious month of the same year.
The country received $7.890 billion during the July-April period of 2008-09 fiscal against $6.430 billion of the corresponding period of the previous fiscal, the BB data showed.
The Bangladesh Bank earlier took a series of measures to encourage the expatriate Bangladeshis to send home their hard-earned money through the formal banking channel instead of 'hundi', and boost the country's foreign exchange reserve.
The country's foreign exchange reserve stood at $6.54 billion Monday due to a robust flow of remittance, the BB officials added.
Besides, the BB has asked the banks to expedite delivery of remittances to the beneficiaries at the quickest possible time to encourage the expatriates to use the banking channel for overseas fund transfer.
Currently, some private commercial banks (PCBs) along with the state-owned commercial banks (SCBs) are desperately trying to increase the flow of inward remittances from the Middle East, the United Kingdom, Malaysia, Singapore, Italy and the United States.
"We are still serious to increase the inflow of remittances to meet our internal foreign exchange demand," a senior official of a PCB told the FE, adding that there is no alternative to meet the import payments without inward remittances."
The World Bank (WB) will support Bangladesh's efforts to introduce remittance transfer via mobile phones, in a move to make the delivery faster and cheaper, officials said Monday.
"The bank has agreed to provide us with financial and technical support for installing the system," expatriates' welfare and overseas employment minister Khondker Mosharraf Hossain told the Financial Express.
"It's going to revolutionise the remittance delivery system. If introduced, it will enable expatriates Bangladeshi to send their hard-earned cash back home from any corner of the world," the minister said.
Mr Hossain, a former top official with the International Labour Orga nisation (ILO), said that the bank would provide necessary equipment for the system.
Officials said the global lender recognises the "huge role" of remittance in the Bangladesh economy and is keen to help popularise the use of mobile telephony for fund transfer.
Under the system, the recipient will get notified by SMS, and then will punche the code he gets on his SMS into a specially-enabled ATM (Automated Teller Machine) to withdraw the cash.
"The system will not only make the transfer process faster, but also will cut down the costs of transfer significantly," a ministry official said.
Already, Bangladesh Bank said the country's top cell phone operator GrameenPhone sought permission from the central bank to start mobile phone-based transfer.
Experts say mobile telephony-based remittance transaction will help whittle down the cost of transfer, making it as low as one per cent of the principal amount.
Currently, global money transfer agencies charge more than 20 per cent on the remitted amount-a fee considered higher in case of small amounts of money ranging from $100 to $200.
Bangladesh became the world's top 10 remittance recipient nation in the developing world in 2008, leaving behind Pakistan.
Remittance is the key economic pillar of the Bangladesh economy, denting rural poverty and stimulating domestic demand.
Last year, 6.3 million Bangladeshis and millions others who work and live abroad wired home $9.0 billion in remittance, accounting for 11 per cent of GDP or Gross Domestic Product. Record 875,000 overseas jobs in the year also helped boost the flow.
The World Bank predicted that the remittance flowing into Bangladesh could dip significantly as overseas employment slid to 38 per cent in the first quarter of 2009.
But economists and migration experts are hopeful that the flow of remittances would hit a new high of $10 billion this year, notwithstanding the worst global recession in 75 years.
Tasneem Siddiqi, an academic at Dhaka University, disagreed with the bank's projection, saying Bangladesh is still unhurt with overseas Bangladeshis sending as much as $2.5 billion in January-March period.
An average remittance size is $350, according to Western Union, top global money transfer operator.
"Use of mobile phone will help boost remittance flow thorough the official channel. It's also going to bridle transfer of remittances through unofficial hundi system," Mr Hossain added.
Meanwhile, another FE Report adds: Bangladesh Bank estimates say only 57 per cent of annual remittance flowing into Bangladesh comes through official channel, the rest finding its way into the unofficial media.
Bangladeshi expatriates sent home a record US$7.89 billion in the first 10 months of the current fiscal, marking a 22.70 per cent growth over the same period of the last fiscal.
"The flow of remittances is still at a satisfactory level despite the ongoing global economic meltdown," a senior official of the Bangladesh Bank (BB) told the FE, adding that the central bank is continuously working to increase the flow of remittances from different countries including the European Union.
"We expect that the flow of remittance may cross $9.50 billion by the end of this fiscal," the BB official said, adding that the central bank would allow more local banks to sign up drawing arrangements with overseas banks and money transfer companies.
The remittances from Bangladeshi nationals working abroad were estimated at $857.03 million in April, a fall by $28.64 million from the previous month. In March 2009, the remittance was $885.67 million, according to the BB statistics, released Monday.
The total amount of remittances dropped slightly in April over that of the previous month, maintaining previous year's trend, the BB official said quoting last year's data.
In April 2008, a total of $781 million was remitted, compared to $808 million of the pervious month of the same year.
The country received $7.890 billion during the July-April period of 2008-09 fiscal against $6.430 billion of the corresponding period of the previous fiscal, the BB data showed.
The Bangladesh Bank earlier took a series of measures to encourage the expatriate Bangladeshis to send home their hard-earned money through the formal banking channel instead of 'hundi', and boost the country's foreign exchange reserve.
The country's foreign exchange reserve stood at $6.54 billion Monday due to a robust flow of remittance, the BB officials added.
Besides, the BB has asked the banks to expedite delivery of remittances to the beneficiaries at the quickest possible time to encourage the expatriates to use the banking channel for overseas fund transfer.
Currently, some private commercial banks (PCBs) along with the state-owned commercial banks (SCBs) are desperately trying to increase the flow of inward remittances from the Middle East, the United Kingdom, Malaysia, Singapore, Italy and the United States.
"We are still serious to increase the inflow of remittances to meet our internal foreign exchange demand," a senior official of a PCB told the FE, adding that there is no alternative to meet the import payments without inward remittances."