Dhaka, Bangladesh – The flow of inward remittances fell by more than 8.0 per cent in July, the first month of the current fiscal year (FY) 2017-18 after celebration of Eid-ul-Fitr festival, officials said.
The remittances from Bangladeshi nationals working abroad were estimated at US$1.11 billion in July 2017, down by $99.04 million from the level of the previous month. In June last the remittances stood at $1.21 billion, according to the central bank statistics. It was around $1.0 billion in July 15.
“The inflow of remittance decreased in July last after celebration of Eid-ul-Fitr, the biggest religious festival of the Muslims,” a senior official of the Bangladesh Bank (BB) said while explaining the falling trend of remittances.
The central banker also said the flow of inward remittances is expected to pick up this month ahead of Eid-ul-Azha festival.
The flow of remittances into Bangladesh dropped substantially by 14.48 per cent to US$12.77 billion in the FY 17 from $14.93 billion a year before, the BB data showed.
Officials and bankers said the declining trend in inward remittance in the recent months, following the slower development activities in the Middle-Eastern countries due to lower price of fuel oil in the global market.
The Middle-Eastern countries are still the main sources of remittances for Bangladesh.
A rising trend in sending hard-earned money by expatriate Bangladeshis through informal channels has also pushed down the flow of inward remittances, they added.
“Workers’ remittance inflows are suffering downturn not just because of weakened demand for migrant workers in major migrant labour-hosting countries but also because it is getting harder, even impossible in some instances, for migrant workers to access legitimate channels for sending money home, with high-cost burdens of compliance with unduly stringent AML/CFT regulations dissuading international banks from relationships with remittance-handlers,” the central bank said in its latest monetary policy statement (MPS), released on July 26.
It also said: “Urged repeatedly in global dialogues, inter alia by the BB and other Bangladesh authorities, global AML/CFT standard-setters are now reportedly looking into this.”
However, the government and the central bank of Bangladesh are pursuing further facilitation and widening of legitimate remittance channels for the migrant workers abroad.
Further avenues bearing promise of significant near-term gains in remittance inflows include promoting sales of Wage Earners Bonds and Bangladesh Government Treasury Bonds (BGTB), both offering much better yields than the migrant workers can get on their savings in the host countries, the MPS explained.
It also said apartment purchase loan facilities in Bangladesh can also be marketed more actively to attract foreign savings of our migrant workers.
The central bank of Bangladesh as well as the government has already taken different measures to revamp the remittance inflows.
As part of the measures, the country’s commercial banks have been instructed to open ‘help desk’ at each branch concerned for ensuring better remittance services.
The BB has also asked the banks to take measures for improving the quality of remittance services so that the Non-Resident Bangladeshis (NRBs) send their hard-earned money home through formal channel.
Currently, 29 exchange houses are operating across the globe, setting up 1,180 drawing arrangements abroad, to expedite the remittance inflow, according to the BB officials.
The central bank of Bangladesh earlier had taken a series of measures to encourage the expatriate Bangladeshis to send their money through formal banking channels, instead of illegal ‘hundi’ system, to help boost the country’s foreign-exchange reserves.