Recently "remittance fighter" has become a common term in the newspapers and television talk shows. This is just a reiteration hat there is no doubt that the Bangladeshi remitters from all around the globe have been remitting their hard earned foreign currency to Bangladesh – earned through their blood and sweat. Their remittance is simultaneously keeping their families and the country in a better state.
So far as I remember, the government under the premiership of Khaleda Zia introduced a number of measures that allowed the remitters to invest their hard earned money in various schemes e.g. dollar premier bonds, dollar investment bonds, wage earner development (WED) bonds etc. The underlying rules, regulations and the policy were unanimously passed by the parliament trying to encourage the remitters to send their money through proper channel. The subsequent governments also encouraged the ongoing foreign currency (FC) flow helping the economy of the country on a strong basis.
I would like to point out here some of the apparently damaging decisions made by the government that created an extremely negative impact on the FC flow.
1. Post COVID-2019 wrong decision by the Bangladesh Bank: Probably in early 2020, the central bank, all on a sudden decided that a remitter cannot invest in the country in any form above one crore taka. By that time, many dubious transactions by frauds engulfed the country in the scale of thousands of crores outside the country. Surely such fraudulence was not unknown to the central bank. Rather this happened with direct cooperation of the officials of Bangladesh Bank.
On one hand, thousands of crores of takas were going out emptying the foreign currency reserves, and on the other hand the unwise decision of limiting the investment of a remitter to only one crore was criminal. The central bank tried to tell us that the frauds were re-emitting money in the form of foreign currency again in the form of fraudulent transactions from outside and the government was unable to pay for the interest. Here I must say, it is the government who must have been responsible for the fraudulent money transactions – either going out or coming in – but the remitters became victims of the situation created by Bangladesh Band, and so the government, unfortunately.
2. Late decision of Bangladesh Bank: When Bangladesh Bank noticed that the remitters are taking back their money abroad for better investment and mega-projects have already started drying up the foreign currency reserves, they decided that there should not be any upper limit on foreign currency remittance. The remitters felt encouraged to send their hard earned money to the country. My question is: why is the central bank gambling on forex remittance and so the reserves? The responsible ones must be brought to justice for their wrong decisions.
3. Unwise creation of bands in the rates of interests: Bangladesh Bank made a wrong decision by introducing bands on the foreign currency interest, depending on the amount of principals invested. This has already created complexities in calculating the interest among both the customers and the bankers. These so-called bands on interest must go and the central bank should refix the same interest no matter what may be the amount of foreign currency.
4. Invest from one scheme to another: Recently the approved banks have started at least one new scheme called off-shore investment under direct control of Bangladesh Bank. This scheme generates better rates of interest. And so many remitters are interested to invest their earnings in this scheme. However, the banks claim that because of an embargo by Bangladesh Bank, one cannot transfer invested money from an ongoing scheme e.g. US dollar investment bonds to the newly introduced off-shore scheme. This embargo, if it exists at all, creates problems for the investors. This embargo must go – the newly appointed governor of Bangladesh Bank could look into this bottleneck.
5. Retired forex investors: The banks concerned asked for too many papers e.g. employment letters, foreign resident cards, certificates showing the current amounts of earning etc. Many retired investors might not have all these documents, whether they live in the country or outside. My suggestion to our central bank governor is to let the retired forex remitters have a peaceful life. Otherwise, a wrong message will go to the potential remitters.
6. All concerned must follow the Law of the Parliament: The set Law of the Parliament says: the remitter can transact their money – principal plus interest - to any foreign account at any time whether the account belongs to the emitter him/herself or to that of a son or a daughter. The BCB should make the banks concerned aware of this parliamentary law to serve the remitters in a better way.
* Dr S M Mujibur Rahman, Emeritus Professor of Physics, Sultan Qaboos University, Muscat, Oman