The government is planning to increase the exiting cash incentive to encourage further the expatriate workers for sending their remittance through legal channel.
Expatriates' Welfare and Overseas Employment Minister Imran Ahmad has sent a proposal to the Ministry of Finance in this regard recently.
Remittance inflows may increase by 35 percent this year. It may increase by another 20 percent next year. Transactions in hundi may increase once the corona effect is eliminated.
Considering all these probabilities, Imran Ahmed has proposed for increasing the remittance incentive to four percent from the existing two percent.
The government has been providing two percent incentive from 2019-20 fiscal year to encourage expatriates to send remittances legally. But some banks are providing another one percent incentive to attract the expatriates, bank officials said.
The proposal of the Ministry of Expatriate Welfare for increasing the remittance incentive from the existing two percent to four percent is a time befitting initiative, they added.
However, the country’s remittance inflow crossed the $20 billion mark in the first 10 months of this fiscal year (FY 2020-21), riding on the relentless efforts of migrant workers to send their hard-earned money home through legal channels.
Bangladeshi expatriates sent $20.66 billion during July-April period, up 39 percent from $14.87 billion in the same time of previous fiscal.
Remittance inflow crossed the $20 billion mark in a single fiscal year for the first time in the country's history, which has provided oxygen to the country’s economy, a breathing space to the government to absorb the economic shocks deriving from the coronavirus pandemic.
Remittance inflow also increased by 89 percent to $2.06 billion in April as the migrant workers sent a whopping amount of funds ahead of Eid-ul-Fitr.
Experts said expatriates are continuously sending money at home despite the coronavirus pandemic. This remittance inflow is considered as the oxygen to the country’s economy.
They said the remittance inflow rapidly increased through official channels due to travel restrictions imposed by most of the countries in an effort to combat the Covid-19 pandemic.
Bankers said that expatriates have been sending more money than other times as the income of many of their families decreased due to the coronavirus.
On the other hand, many expatriates returned home permanently with their savings money during the pandemic. It also helped to boost remittance flow, they added.
An official of Bangladesh Bank (BB) said that various time-befitting initiatives taken by the government have resulted in an increased awareness among expatriate workers to send their hard-earned money through legal channels, pushing up the remittance inflow.
Some economists attributed the growth in remittance inflow to a government provision of two percent cash incentive to remitters on inward remittance for the last fiscal year.
This will significantly increase the remittance inflow through legal channels and discourage the ‘hundi’ business, they said.
Dr Atiur Rahman, former Bangladesh Bank governor, told Bangladesh Post, “Expatriates are virtually providing oxygen to our economy despite they have faced many difficulties due to coronavirus pandemic.”
“The central bank has taken several initiatives, including providing remittance to remitters easily, buying dollars directly from the market with a view to keeping a stable forex market and so on. These initiatives encouraged expatriates to send their money through legal channels,” he added.
Atiur said that this is the highest monthly remittance received in the country’s history helping push foreign exchange reserves up to $45 billion recently. Definitely it is very good news for us, he added.
However, Bangladeshi expatriates sent home $11.65 billion in FY11, $12.84 billion in FY12, $14.46 billion in FY13, $14.23 billion in FY14, $15.31 billion in FY15, $14.93 billion in FY16, $12.77 billion in FY17, $14.98 billion in FY18, in $16.41 billion in FY19 and $18.20 billion in FY20 respectively, Bangladesh Bank sources said.
More than 1.02 crore Bangladeshi expatriates are currently working in some 174 countries across the world.