Emphasis on bringing remittance through legal channels

At present the biggest challenge for the country’s economy is the pressure created on the balance of payments. The foreign exchange reserve has reduced. And, this might continue for the next few months.

Under the current global conditions, it’s impossible to increase foreign investment and export earnings dramatically.  However, it’s possible to do that with the remittance.

Alongside legal channels, remittance is coming to the country via hundi or illegal ways. When remittance comes through illegal channels, no foreign currency is added to the country’s reserve.

An infrastructure of delivering remittance to receivers quickly has to be built. Besides, it’s important to come up with newer products of savings and investment to encourage remittance transfer through legal channels.

And, these can be done in the quickest possible time using digital financial services.  

Speakers made these observations at a roundtable titled ‘Remittance via legal channels: possibilities of digital mediums’, organised by Prothom Alo. The roundtable was held at Prothiom Alo’s office in capital’s Karwan Bazar area on Thursday.

Former executive director of Bangladesh Bank and former deputy head of Bangladesh Financial Intelligence Unit (BFIU) Mahfuzur Rahman said that expatriates won’t be interested in sending remittance through legal ways if there’s a big difference between the dollar exchange rates of legal and illegal channels.

Besides, if attractive investment schemes can be made, it will increase the flow of remittance through legal channels.

Lila Rashid, another former executive director of Bangladesh Bank said legal and illegal channels are competing in fetching remittance. Speedy service, at what cost and with how much confidentiality it reaches the customer are significantly vital in this case.

She said, if remittance arrives through illegal means dollars don’t get stored in the county’s name. However, everyone has to be made aware of the benefits that can be availed by transferring remittance in legal ways.

Many Bangladeshi expatriate in the Middle Eastern countries are unable to send their income through legal channels for also the lack of valid documents. The embassy officials have to work towards this end.

Chief external and corporate affairs officer of Mobile Financial Services (MFS) company bKash Sheikh Md Monirul Islam said that everyday 13 to 14 thousand Bangladeshi expatriates are sending remittance worth Tk 110 million on an average to bKash customers.

Most of the 10 million plus Bangladeshi expatriates reside in different countries of the Middle East. But the remittance flow through MFS from there is low basically due to the lack of technical knowledge. Therefore, if the expatriates living over there are made aware of this, more remittance will pour through legal channels.

Uttam Kumar Saha, senior executive vice president of Dutch-Bangla Bank pointed out a few of the reasons behind low remittance flow from the Middle East in legal methods. He said expatriates can even send money using the apps of exchange houses, sitting at home.

Meanwhile, remittance is arriving in the country easily through MFS. And, that money can be spent directly from the MFS account in exchange of a service charge. On the opposite, there’s no service charge in agent banking for delivering remittance, he added further.

Executive vice president of Mutual Trust Bank Mohammad Zahidul Ahsan remarked that the dollar exchange rate should be market-based if the remittance flow through legal channels is to be increased.

He said, “Expatriates want their family members in the country to receive the money as soon as they transfer it from abroad. We have infrastructural flaws, when it comes to that.”

Head of foreign remittance department and senior vice president of Bank Asia Golam Ghafar Imtiaz Chowdhury said that record number of workers went abroad in the outgoing fiscal year. More than 2 billion (2.04 billion) dollars came in remittance last August. In September, it further reduced to USD 1.54 billion.

Does that mean migrant workers are not sending money! He said that expatriates have to be made aware of how their money is arriving in the country. They have to be made realise what benefits they can avail in the future for sending remittance through legal channels.

Sayema Haque Bidisha, a professor of economics at Dhaka University, stressed on coming up with newer schemes of savings and investment to encourage expatriates in sending their income through legal means.

She said, basically it’s the village women who receive the remittance. They have to overcome some obstacles in receiving bank services. MFS is a bit easier to avail, in comparison. So, awareness and required skills have to be increased among women in using digital financial services.

Chairman of private research institute Policy Exchange Bangladesh Masrur Reaz said that digital financial services have to be reinforced in order to raise remittance flow through legal channels. It started off brilliant but advancing very slowly.

The trend of moving from Bangladesh to the Middle East has increased even further in the past 10 years. Basically, less skilled workers go to the Middle East for relatively lower wages.

In order to increase remittance flow in the future, more skilled workers have to be sent in Europe and other regions, he added.

Emeritus fellow at Unnayan Shamannay Khondaker Sakhawat Ali said that a trend has been created of transferring undeclared income out of the country. And, the regulatory agencies have to take bold steps for stopping that.

Associate editor at Prothom Alo Abdul Quayum opened the roundtable with his speech while assistant editor at Prothom Alo Firoz Choudhury moderated it.

Meanwhile, Shawkat Hossain, head of online at Prothom Alo presented keynote. He said that the drives of law and order enforcement agencies won’t suffice in stopping the hundi. Economic issues have to be dealt with economically. And, everyone has to come together for that.