Remittances hover around 10 percent of GDP

DHAKA, March 5 (Xinhua) — Remittances in Bangladesh now stand around 10 percent of GDP, rising from 5.0 percent of GDP in the beginning of 2000s, said the central bank chief.
Bangladesh Bank Governor Atiur Rahman said Tuesday in a conference that over the past 4 years (FY 2009-13), remittance inflows in Bangladesh have grown around 11.0 percent on an average, whereas in the other Asian countries the growth was 7.1 percent (World Bank).
Despite global economic crisis and political turmoil in Middle East, Bangladesh’s financial and external sector remained resilient with foreign exchange reserves more than USD 18.0 billion aided by robust growth in exports, moderate growth in imports and due to unflinching remittance inflows, said said.
The inflows of remittance in FY 2012-13 were around 14.46 billion, a 12.59 percent growth ushering a current account surplus for the last five years, only in south Asia despite being a trade deficit country.
This demonstrates inherent strength of our external sector and hence that of our currency. And one must give credit to NRBs for attaining this strength.
However, the growth was singnificantly tained during first half of the current fiscal year mainly due to sluggish export of manpower. Political instability played a role certainly.
To keep this flow intake BB has taken major initiatives to ensure easy and hassle free remittance transfer.
It has simplified approval policy of drawing arrangements between foreign exchange houses and domestic banks. Thirty-seven banks have already been permitted to set up 1084 drawing arrangements with 288 exchange houses all over the world for collection of remittances.
Responding to this arrangement, some banks have already established exchange houses abroad. BEFTN and mobile banking are operating in full-swing to ease remittance disbursement. Micro Finance Institutions (MFIs) are also involved as partners in smooth delivery of inward remittances. Banks are now using the branch networks of the MFIs and Post Offices as the sub-agent for remittance distribution.
Mobile banking services have also been made available to our remitters.
All these payment facilities have virtually eliminated the informal remittance inflows. In the back drop of recent slowdown of foreign employment, government has taken initiative to send worker abroad under its supervision by only 33 thousand taka with creating a low cost fund facility by setting up a bank named ‘Probasi Kollyan Bank’ which is the first of this kind of public-led manpower export.
The government is desperately trying to expand its labor market particularly into the East Asian countries, including Indonesia, Singapore and Brunei.
Side by side, active participation of private sector is also required for higher foreign employment and thereby higher flow of foreign remittances. I am sure there will be greater cooperation between public and private sectors. The initiatives of the Centre for NRBs are noteworthy in this regard.
BB has also has taken various initiatives including setting up an online database for NRBs in support of improving working conditions and providing NRB related information.
For NRBs, this database will help to promote and uphold investment information, proper remittance channel and method, important financial or economic moves of government in which NRBs can participate.
NRBs can also benefit by submitting complaint, query or feedback and using this database to link between themselves and search other NRBs according to country, profession etc.
BB will also conduct its financial literacy programme among the NRBs through the database so that the expatriates can take appropriate decision about investment. In addition, we have given licenses to at least three NRB banks to improve the pace of remittances & foreign investment inflows.
BB’s initiatives are not only limited to the country itself but also cover other justification. Remittance, investment and trade fairs were arranged in UK, USA, Singapore, Malaysia, Bahrain, Oman, Germany, Italy, Greece and Kuwait for inspiring the nonresident Bangladeshis to invest in US Dollar Premium Bond, US Dollar Investment Bond and Wage-earner Development Bond and send their remittance through banking channel, and for ensuring these services through different exchange houses and drawing arrangements of Bangladeshi banks abroad.
BB also urged the representatives of exchange houses to be vigilant so that the NRBs would not face any harassment in getting banking services. They should also be encouraged to high yielding Taka bonds.