The timely initiative of providing cash incentive on remittance transfers has started yielding results as remittance saw a sharp rise in the first half of FY20.
Wage-earners’ remittance inflow increased by 23 per cent year-on-year to over Tk 7.71 billion during the July-December period from Tk 6.29 billion one year ago, latest Bangladesh Bank (BB) data suggest.The success was largely contributed to the government’s decision to provide two per cent cash incentive on foreign remittances to woo wage earners send home money through formal channels.
The half-yearly growth is remarkable as remittance inflow hit a record high at $16.42 billion in 2018-19 fiscal year that jumped from $14.98 billion a year earlier.
In 2019-20 fiscal’s budget, the finance minister announced the cash incentive and proposed Tk 30.60 billion allocations for the purpose in response to long-term demand.
Since July 01 this year, remitters have so far received $14.28 billion as the finance ministry has released two instalments of the allocated money, according to BB data.
Recently, the central bank issued a circular on the cash incentive policy, outlining the process of getting the incentive which said remittance receivers won’t need to show any kind of papers to withdraw up to $1,500 remittance.
But withdrawing money over this ceiling would require showing copy of passport of the sender and his appointment letter provided by his foreign employer.For the businessmen, receivers have to submit a copy of legal foreign business licences of the remitters.
Now, the central bank has nearly finished the allocated funds as it has slightly over Tk 1.02 billion cash in hands to continue the programme.
In view of this, it has sought more money on an urgent basis from the ministry of finance to keep it running, the ministry sources said.
In a recent letter, the central bank requested the finance ministry to release Tk 15.30 billion at a time as the third and fourth instalments of the allocated money.
However, the ministry has decided to disburse Tk 7.65 billion as the third instalment of the requested money in line with its monitoring cell’s suggestions. The fund release in under process now, sources added.
In its letter, the central bank informed that it released $14.28 billion cash incentives through 55 scheduled banks until December 11 last year.
It also sent a list of the banks, showing which banks gave how much money for the purpose.
Agrani Bank provided the highest amount of nearly Tk 1.42 billion out of the state-owned banks, while Sonali bank released nearly Tk1 billion, Janata Bank Tk 0.75 billion and Rupali Bank Tk 188.7 million.
Among all the banks, Islamic Bank distributed the highest amount of Tk 2.71 billion, while private bank Al-Arafah Islami Bank Tk 306.6 million and Social Islami Bank Tk 141 million.