Incentive pushes remittance 20.5pc up in July-Oct

Staff Correspondent | Published: 00:00, Nov 04,2019


Remittance inflow rose by 20.41 per cent year-on-year in July-October of the fiscal year 2019-2020 amid a sharp growth in remittance receipts in last couple of months as the government started giving incentive to the beneficiaries against remittance.

In the four months of the current fiscal year, the country received $6.15 billion, up $1.04 billion on $5.11 billion in the same period of the previous fiscal year.

Bangladesh Bank executive director and spokesperson Md Serajul Islam told New Age that the inflow of remittance had witnessed significant growth recently amid the government’s move to issue 2 per cent cash incentive against the inward remittances.

The government’s move has prompted many of the expatriates to send money through the banking channel instead of sending through the illegal channel known as ‘hundi’, increasing the volume significantly in last couple of months, Serajul said.

Besides the incentive factor, the transaction through the banking channel would also benefit the remittance beneficiaries to avail different other banking services, he said.

In last two months of FY20, the country’s remittance inflow grew by 28.85 per cent and 32.32 per cent respectively.

Remittance flow rose by $328 million to $1.47 billion in September this year from $1.14 billion in the same month last year.

In October, the inflow of remittance increased to $1.64 billion, up $400 million on $1.24 million in the same month of FY19.

To encourage the expatriates for sending money through legal channel, the finance minister in the national budget for the fiscal year 2019-2020 announced the incentive.

In line with the government’s budgetary announcement, the central bank on August 6 this year issued guidelines on issuing incentive against inward remittance to encourage repatriation of earnings of the expatriates through legal channel, setting July 1, 2019 as the effective date.

Following requests from the BB, the finance ministry in October 2, three-months after the budgetary announcement, released Tk 1,530 crore for six months.

Another Tk 1,530 crore out of the government’s Tk 3,060 crore in budgetary allocation for FY20 to give incentive to the beneficiaries of remittances would be released later.

Although the central bank released the money in favour of the respective banks, many of the beneficiaries of inward remittances are yet to get the incentive for various reasons.

For instance, an official of Sonali Bank head office told New Age last week that the bank was yet to start giving incentive against remittance through bank accounts.

The official, however, said that the bank would introduce the facility soon and the beneficiaries would get the incentive in arrear from July 1, 2019.

Meanwhile, the central bank has issued instruction to the banks for wider circulation of the information among the remittance beneficiaries especially in the remote areas and abroad through the country’s embassies abroad.

Apart from the incentive factor, depreciation of local currency taka has become another incentive for the expatriates.

The interbank exchange rate of a US dollar increased to Tk 84.75 on Sunday from Tk 83.9 at the beginning of January this year.

In FY19, remittance inflow hit record $16.4 billion, breaking the previous highest of $15.32 billion in FY15.

The inflow of remittance in FY19 was 9.48 per cent or $1.42 billion higher than the amount received in FY18, $14.98 billion.

More about:

Want stories like this in your inbox?

Sign up to exclusive daily email