The inward remittance decreased by $1.86 billion or 16.86 per cent in the July-March period of the current financial year 2016-17 compared with the corresponding period of FY16 as inflow dropped for the ninth month in a row this FY.
The country received $9.19 billion in remittance in July-March of the current FY against $11.05 billion in the same period of last FY.
Experts and bankers said many non-resident Bangladeshis opted for illegal channels like hundi to send their money home because of a lower rate of the US dollar against the taka in the banking sector.
The monthly remittance inflow on year-on-year basis also dropped in March, for the ninth month in a row, according to the latest Bangladesh Bank data.
The country received $1.07 billion in remittance in March, down by 16.19 per cent from $1.28 billion received in March 2016.
Experts and bankers said the remittance inflow continued to drop because of illegal hundi, an informal system for transferring money, as there has been a large US dollar-rate gap between the banks and the curb market for long.
BB officials, however, said the exchange rate gap between the banks and the curb market has recently decreased with easing of cash dollar crisis in the banking sector.
But, the persons who are involved in the international cartel of hundi have introduced a door-to-door service for sending money to the relatives of expatriate Bangladeshis, which has made the NRBs prefer the illegal channel, they said.
The BB officials said the recent effort of the central bank to cut down
hundi, especially in the name of mobile banking, was yet to have any impact on the remittance inflow situation.
There are allegations that different quarters allure the NRBs to send money through mobile banking, mostly bKash. But the quarters never send the money home, their agents in Bangladesh pay receivers cash in the form of taka instead.
Against the backdrop, the BB has recently tightened ceiling on transactions through the mobile financial services and identification process of clients to tackle hundi and money laundering using the services.
Two inspection teams of the central bank have recently visited four countries — Saudi Arabia, United Arab Emirate, Malaysia and Singapore — to unearth the real cause of decline in the inward remittances.
The inspection teams are yet to submit their reports to the central bank’s high ups, a BB official told New Age on Sunday.
Besides, the BB has planned to place a proposal before the government to give cash incentives to non-resident Bangladeshis who send up to $200 in remittance to Bangladesh to tackle hundi cartel, he said.
Bank Asia managing director Md Arfan Ali told New Age on Sunday that the central bank should take initiative to eliminate harassment the NRBs face in remitting their money.
The scheduled banks should take measure to provide the door-to-door services to the relatives of remitters so that they will receive the money sitting home, he said.
The BB and the scheduled banks should take initiative to decrease the exchange rate gap between the banks and the curb market to encourage the remitters to send their money through the legal channel, he said.
The inward remittance will increase if the banks charge the NRBs less for sending their money through the banking channel, he added.
Former interim government adviser AB Mirza Azizul Islam told New Age that the exchange rate gap between the banks and the curb market was still high, which fuelled the hundi business.
The government and the BB should take measure to prevent the illegal channel to increase the inward remittance, he said.
Source: New Age