Saturday, 16 October, 2021

Govt mulling over 3pc remittance incentive for low-income expats

  • Staff Correspondent
  • 25 July, 2021 12:00 AM
  • Print news

Bangladesh Bank (BB) has recommended providing 3 percent incentive for the low-income group of expatriates who sends a maximum of $500 remittance in a month to the country each.

The government wants to bring more remittances through legal channels. As part of it, the policymakers are considering waiving the remittance fee (sending charge) for the low-income expatriates.

As the fee-waiving process is quite complicated, the central bank has proposed an additional 1 percent incentive for expatriates sending remittances of a maximum of $500 or less per month in addition to the existing 2 percent one.

Earlier, the Ministry of Finance wanted to know the process for waiving the remittance sending charge for the low-income group of expatriates to increase the remittance earnings through the legal channels and discourage hundi.

The Department of Financial Institutions is reviewing the proposal of Bangladesh Bank. The decision will be taken after discussion with the government policymakers, sources said.

Bangladesh Bank’s proposal stated that at a meeting of the National Steering Committee on Expatriates’ Welfare and Overseas Employment at the directive of the Prime Minister, it was decided that the fee for sending remittances legally should be waived to discourage migrant workers who send small amount of remittance to use hundi for transferring the money.

In line with this, the central bank arranged several meetings with top remittance-receiving banks to find a way of waiving the fees for a group of expatriates.

Most of the banks recommended that the process of waiving fees is complex and the rate of sending remittance is also different based on countries and agencies. Rather, it is better to increase the incentive for small income group of expatriates, sources said.

Replying to a query, Md Serajul Islam, spokesperson for the BB, told the Daily Sun on Saturday that the central bank gave its suggestions and now the ministry will take the final decision after discussion with the government policy level. “Bangladesh made a record in receiving inward remittance in the last fiscal year as a blessing of 2 percent incentive. I think if more benefits are given, the remittance will increase more in the legal channel,” he said.