Remittance set to cross $ 6b this fiscal year |
Star Business Report
With a continuous growth in remittance in the last four months, the country's remittance inflow is set to cross US$ 6 billion this fiscal year.
The non-resident Bangladeshis (NRBs) already sent $ 5.46 billion during the July-May period of this fiscal year (2006-07) compared to $ 4.37 billion during the same period of the previous fiscal year, recording around 25 percent growth.
Such a rise in the remittance also helped the country's foreign exchange reserve to hit $ 4.48 billion yesterday.
The remittance inflow reached $ 561.92 million in May, $ 545.93 million in April, $ 537.29 in March and $ 500.32 million in February of this fiscal year.
Bankers said the government's recent measures against 'hundi', an illegal way of money transfer, encouraged the Bangladeshi wage earners to send money home through legal channels.
Besides, according to sources, recently a considerable number of skilled manpower were exported to some countries including Malaysia and Saudi Arabia who are also remitting a good amount of money.
The private commercial banks have also taken initiatives to increase their earnings from remittance services, which is ultimately helping the country in witnessing a huge remittance inflow, the sources said.
The NRBs send roughly $ 7 billion every year and a significant amount of the total amount still comes through 'hundi'.
Recently the Asian Development Bank (ADB) also said despite a steady growth in remittance inflow, a major portion of remittances enter the country through illegal and informal channels due mainly to insufficient number of bank branches in remote areas and procedural complexities.
The ADB in its Quarterly Economic Update on Bangladesh published in March said such illegal and informal channels keep foreign currencies out of reach of the formal economy, for which the country could not reap the desired benefits.
It, however, said the potential for much greater flows through the legal banking system exists. "Boosting the capacity and efficiency of financial institutions is crucial to increase in remittance flows by directing more funds into official channels," it said.
The major challenge confronting the financial sector is to integrate remitters and recipients into the legal financial system, it said, adding, "Private commercial banks that are more efficient service providers, but have a limited number of branches in rural areas, need to create a better network in partnership with licensed micro-finance institutions or even local post offices to broaden the service coverage area."
Along with the ADB, the local bankers also hope there is still a good chance to see further rise in remittance inflow through official channels.
"Some private banks are marketing their remittance services very aggressively and offering quick and secured services to the clients besides encouraging the Bangladeshi wage earners to send their money through legal channels," said a banker.
The central bank also continues its efforts to encourage the NRBs to send their money through official channels.
Sonali Bank, Agrani Bank, Pubali Bank and Islami Bank Bangladesh Ltd are the major players handling the remittance inflow.