FE Report
A panel of the Jatiya Sangsad (JS) proposed an incentive for remitters to encourage them to use the banking channel for sending their money home from abroad, sources said.
The Parliamentary Standing Committee on Ministry of Expatriates Welfare and Overseas Employment (MEWOE) recently sent the proposal to the finance ministry seeking steps on providing the incentive, the sources said referring to the decision of the 19th meeting of the standing committee.
The finance division sent the proposal to the financial institutions division for taking necessary steps in this regard, an official at the finance division said.
"We think that the flow of inward remittance will increase, if the government introduces incentive for Non Resident Bangladeshis (NRB) who are sending their hard-earned money to the country," a high official at the MEWOE told the FE.
"Both the government and the Bangladesh Bank (BB) are now sincerely working to expedite the flow of inward remittances from different parts of the world in 2017, he said.
The flow of inward remittance decreased in recent months. But, the inflow increased significantly in May and August as happened in the last several years ahead of two Eid festivals, a source concerned said.
However, the remittance inflow in September stood at US $853.73 million, which was the lowest monthly figure in seven years, according to the central bank figures.
Finance Minister AMA Muhith in his budget speech for current fiscal year (FY17) acknowledged that various hindrances to remittance transfer and relative benefits of remitting money through informal channels are among the reasons behind fall in the remittance flow to the country in the recent months.
In the post-budget press conference, the minister said remittance costs would be lowered to encourage the migrant workers to use the banking channel.
The International Monetary Fund (IMF) in its Article IV consultation report said: "Another reason for the decline in remittances, while difficult to measure, could be related to a shift away from banking towards informal channels for transferring funds."
It said informal channels continue to exist in many South Asian countries, including Bangladesh. Some of the declines in remittances may be attributed to a possible shift by remitters to informal channels.
A senior official at the ministry of finance (MoF) told the FE that remitters prefer the informal channel to the formal one as remittance-transfer from abroad is much faster.
The official said the ministry is working on devising mechanisms to reduce the remittance cost to a minimum level so that migrant workers use the banking channel for the same instead of risky informal means. "We are hopeful about preparing the method shortly," he said.
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