Bangladesh Bank has requested the government to release fund for providing cash incentive against the inward remittance.
The government in the budget for the fiscal year of 2019-2020 announced that 2 per cent cash incentive would be provided to the beneficiaries of inward remittance.
A senior BB official said the central bank had recently sent a letter to the finance ministry seeking fund for the purpose.
‘We have already sought fund from the finance ministry so that banks can start giving the incentive to the beneficiaries against remittance earnings,’ the official told New Age on Tuesday.
He, however, mentioned that the central bank did not specify any fund amount in its letter sent to the ministry.
Banks would start disbursing incentive against remittance after getting fund allocation from the central bank.
The government in the budget allocated Tk 3,060 crore for the purpose in an expectation that the incentive would significantly increase the remittance flow through the legal channels and discourage the illegal channels like ‘hundi’ business.
In line with the budgetary announcement, the BB has already issued guidelines in this regard, stating that no document would be required for receiving the incentive against remittance worth up to $1,500.
Banks would get three-month fund allocation from the central bank based on the average monthly repatriation of remittance through the banks in the preceding year, the BB guidelines said.
If the allocated fund exhausts in three months, banks would continue giving the incentive and would adjust the amount later with the government’s allocation.
Officials of the banks said that they had been making preparations in this regard and expected that the procedure could be started after receiving money from the central bank.
Trust Bank managing director and chief executive officer Faruq Mainuddin Ahmed told New Age, ‘As we are yet to receive fund from the central bank for issuing incentive against remittance, we are conducting information technology upgradation as per the mode of operation specified by the central bank.’
He, however, said that the bank would be prepared enough to start giving incentive against inward remittance immediately after getting fund allocation from the central bank.
In his budget speech, finance minister AHM Mustafa Kamal said that to mitigate the burden of increased expenses for sending foreign remittance and to encourage bringing remittance to the country through the legal channels, an incentive at the rate of two per cent on money remitted by expatriate Bangladeshi would be provided from this financial year.
In FY06, the country’s remittance earning was $4.9 billion, which grew by three times to reach $16.4 billion in FY19.
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