Bangladesh Bank has planned to place a proposal before the government to give cash incentives to non-resident Bangladeshis who send up to $200 in remittance to Bangladesh.
The central bank has taken the move to encourage the remitters to send money through legal channel amid the drop in remittance inflow to the country because of rise in hundi, an illegal channel for sending money.
BB is now preparing a proposal for the finance ministry for giving the cash incentives to the NRBs who send remittance in legal banking channel.
NRBs will get 1 per cent to 2 per cent cash incentives against remittance between $1 and $ 200, said officials.
An NRB can get cash incentives twice a month for sending remittance up to $200 each time, according to the draft BB proposal.
BB officials said that the government might be given two options, either government would give the incentives or the banks would provide the incentives.
In case of government providing the incentives, an NRB sending $200 will get between Tk 160 and Tk 320 as cash incentives if the proposal of giving 1-2 per cent cash incentives is approved.
The beneficiary of the remittance here in Bangladesh will get the incentives on behalf of the remitters, explained a BB official.
He said that the idea of the ceiling of $200 was taken as most of the Bangladeshi workers abroad send home up to that amount. ‘Besides, the recent allegations that the illegal hundi has been taken place through mobile banking through which Tk 50,000 can be transacted a month also prompted BB to make the ceiling,’ he said.
In case of banks giving incentives, the remitters may get the chance to send money without paying any charge or commission to the foreign exchange houses or banks from where they will send the money.
The NRBs are now paying around 1 per cent charge to the foreign banks and exchange houses against the foreign currency they send to Bangladesh.
Banks here in Bangladesh will pay the charges to the foreign banks and exchange houses on behalf of the remitters, said the official.
The central bank may ask the banks to pay the charges from their corporate social responsibility programme.
The finance ministry will take a decision in this regard, he said.
The central bank organised a workshop on February 25 titled ‘Financial Literacy and Inflow of Remittance’ in Sylhet where Bureau of Manpower Employment and Training deputy director Johora Monsur placed the proposal on giving incentives to the remitters.
The central bank has recently issued letters to the managing directors and chief executive officers of all banks asking them to submit the information about what amount of remittances enter the country at the range of $1 and $200 in every month.
The BB official said that the remittance inflow continued to drop in the recent months because of illegal hundi, an informal system for transferring money, as the rate of US dollar has maintained a large gap in banks and curb market for long.
The BB data showed that the inward remittance decreased by 17 per cent to $8.11 billion in the first eight months of the current financial year 2016-17 from $9.77 billion in the corresponding period of the FY16.
The country received $936.20 million in remittance in February, down by 17.60 per cent from $1136.27 million received in February 2016, which was also a five-year and three-month low.