The remittance inflow into Bangladesh dropped to $12.76 billion in the last fiscal year from $14.93 billion the previous year, marking a 14.48% decline year-on-year despite several moves taken by the government to boost the inflow.
The remittance in the 2016-17 fiscal year is also the lowest in the last five years, according to the latest Bangladesh Bank data.
Last fiscal year, the money sent home by Bangladeshi expatriates fell steadily every month, except in May
, because of Ramadan and appreciation of taka against dollar.
Although the central bank had expected the inflow to increase in June due to Eid-ul-Fitr, the figure declined by 17%, year-on-year – in June, the country received $1.21 billion from the expatriates compared to $1.46 billion a year ago.
Experts said the strong value of taka against dollar, the decline in oil prices in the global market, income fall of expatriates working in the Middle East and use of illegal channels to remit money were major reasons behind the fall in the inflow.
“Most of our remittance come from the Middle East where the job markets have been hit by the declining oil prices. Many of the Bangladeshi expatriates there have either lost their jobs, or their earnings have reduced. All these things have affected the remittance inflow,” said AB Mirza Azizul Islam, former adviser to the latest caretaker government.
He advised for deprecation of taka against dollar to increase the inflow of money as it would encourage the expatriates to remit their earnings through legal channels.
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According to a senior executive of a private bank, remittance through illegal channels like “digital hundi” was another reason behind the fall in remittance.
Meanwhile, the Bangladesh Bank has taken several steps to increase the inflow. On March 13, the central bank sent two expert teams to Saudi Arabia, Malaysia and Singapore to see why the remittance was on the downward trend.
They found many expatriates living those countries sending money home using mobile financial services (MFS) like bKash and Rocket, which, the officials said, are illegal channels known as “digital hundi.”
Following the visits, the Bangladesh Bank came up with a number of efforts in monitoring the MFS, including capping the transaction ceiling so money cannot be sent through those channels.
The central bank also asked the banks to take measures to improve the quality of remittance services so that the non-resident Bangladeshis can send their hard-earned money home through legal channels.
Moreover, the banks have been instructed to open help desks at each branch to ensure better remittance service.
“The central bank has already taken different measures to increase the remittance inflow,” said a senior executive of Bangladesh Bank.
“However, we are still working to boost the sector taking innovative steps,” he added.