An anticipated government decision to waive charges on remittances from Bangladeshis earning overseas was earlier greeted by all. But the confirmation came when finance minister AMA Muhith announced on May 13 at a pre-budget discussion meeting with bankers that expatriates 'will not have to pay any charge to remit their earnings to Bangladesh .'It is an emphatic statement based on the prime minister's wishes, poised to be implemented, one thinks, on the cusp of the budget for the next fiscal year.
Speculations are afoot on how this full waiver would be given to the remitters. For, after all, some cost is involved in remittance transfers. Typically, a fee of $10-15 is entailed by a sender each time that he or she remits money to his/her beneficiary at home. Maybe, this will be borne by the government as key source of earning to financial institutions that deal with remittance transactions.
There is also talk of cash incentives to expatriates who will send up to $200 in remittance at a time to their country. According to a Bangladesh Bank proposal, either the government would give incentives to the banks or provide these to receivers in the home country.
Two major factors have prompted the government's move to massively attract the wage earners' remittances to official channels. Firstly, the decline of inward remittances during January-April quarter by 16 per cent. Secondly, the preponderance of Hundi or other unofficial channels as the preferred options for many an expatriate earner. The rise of Hundi is linked to the rate of the US dollar between the banks and the curb market.
Moreover, mobile banking and informal channels do not require extra costs which otherwise are entailed on the institutional routes.
It is high time for the government to be on guard against the serious implications of money transfers through unofficial routes that do not only keep off the government radars, but also remain outside the pale of accountability. That the government is seriously taking up the task of streamlining remittance-centred affairs looks like a robust undertaking; but the devil may be in the details.
There cannot be any one-size-fit-all formula. Diasporas living in different countries have to go through different methods. We need trained experienced hands to be in charge of globe-girdling transactional operations. But one thing is for certain ie.the sums are so vast that their commercial prospect will interest anybody or an institution in a host country.
What will matter most are availability of the service nearer home, ease of transaction, trust, monitoring and competitive terms. To borrow from a creative ad from Coca Cola -"To get the share of the throat, we make it easy and available"-we need something of that mantra
According to TED-Technology, Entertainment, Design-a media organization posting short talks live for free, 'poor are paying disproportionate amounts of charges' for the remittances representing a form of exploitation of the poor by the rich.
The incomes from them do carry some ancillary costs like repaying debts at high interest, provide for their families and dependants-all of them when they themselves may well be living in deplorable conditions. So there is a human side to it.
Thus throwing lines to livelihoods, health, education and wellbeing to their beneficiaries should be like easy plucking of fruits from low-lying orchards.
One final point, there is virtually no pain or cost involved because the transfers are done electronically. And as for vetting, Sonali Bank has a template, courtesy of the U.K.FCA (financial conducts authority), to go by.
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