Bangladesh Bank (BB) has sought an allocation of more Tk 10 billion as incentives against inward remittance as the current fiscal year’s allocation of Tk 30.6 billion already ran out.
The central bank officials said the inward remittance will total $25 billion at the end of the fiscal year if the pace of inflow continues.They said the allocation as remittance incentives had been exhausted within first nine months of the fiscal year.
Bangladesh Bank figures showed that the country was earning record figures as remittance in the recent months.
In July 2020, the first month of the current financial year, the growth of remittance was 62 percent. The following months witnessed from 20 to 30 percent growths.
In March, the remittance earning registered 50 percent growth while in April it was 89 percent, the highest ever.
According to the Bangladesh Bank, the inward remittance has marked a record of $20.67 billion in the first 10 months of FY2020-21, exceeding the total amount of the previous year.
In the last fiscal year, Bangladesh received inward remittance of $18.2 billion while in 10 months (July-April) the country received $20.67 billion inward remittance blessing on 2 percent instant cash incentive.If the current trend of remittance flow continues, it could reach to $25 billion by the end of FY2020-21.
The government announced 2 percent cash assistance to increase the flow of remittances through banking channels. According to the existing policy, there is no need to quarry or sort any documents to get cash assistance up to Tk 500,000.
The magic of cash assistance makes a new record in remittance flow.
Immediately after the announcement of cash assistance, the remittance flow started increasing.
According to the statistics of Bangladesh Bank, in these two financial years 2015-16 and 2016-17, there has been a negative growth of remittance flow.
For example, in FY2015-16, the growth in remittance flow was 2.5 percent negative and further worsened to 14.5 percent in FY2016-17.
From the FY2017-18, the flow of remittances has been increasing continuously.
In FY2017-18, the remittance earning grew at 17 percent and in FY2018-19 the growth was 10 percent.
Due to the increase of remittance inflows, the entire amount of cash assistance allocated has already been exhausted within nine months.
Cash assistance at the rate of 2.0 percent against the amount of inward remittance, for three months (April-June), the BB sought TK10 billion.
Experts, however, said not only the expatriates are sending their hard-earned money to the country, but also those who took money abroad through hundi are sending as remittances in various ways.
Describing it as a good sign for the economy, they said foreign currency is entering the country as remittance in whatever the format.
Bangladesh’s forex reserves have crossed $45 billion on May 3, 2021, for the first time in the country’s history as the expatriates sent home $2.06 billion in April, a year-on-year increase of 89 percent. The forex reserves have been rising since March 2020 as the flow of inward remittance increased and demand import payment fallen following economic activities affected by the coronavirus pandemic.