The central bank has relaxed its regulations for receiving cash incentives on the money sent by expatriate Bangladeshis further aiming to expedite the inflow of remittances despite the Covid-19 pandemic, officials said.
Under the latest relaxations, banks are now allowed to provide the government-announced 2.0 per cent cash incentives to beneficiaries of remittances without verifying relevant documents of the remitters with the overseas exchange houses as well as banks.
Such relaxation will be considered only for inward remittances amounting to more than US$5,000 or Tk 500,000, they added.
“We’ve relaxed our regulations to ensure receiving such incentives by the expatriate Bangladeshis as early as possible to encourage them to send more remittances through official channels instead of unofficial ones,” a senior official of the Bangladesh Bank (BB) told the FE while explaining the main objective of the relaxations.
He also said now relevant documents will be verified between local remittance receiving and disbursing banks.
Beneficiaries will have to submit necessary documents of the remitters to his/her own bank branch, which will disburse the cash incentive against the remittances, according to a notification, issued by the central bank, on Wednesday.
The disbursing bank will send confirmation to the remittance receiving bank to release such incentive shortly after examining all documents on their own.
The remittance receiving bank would release the cash incentive on the basis of confirmation of the disbursing bank, it added.
The documents will be collected and verified by the receiving bank for releasing cash incentive against inward remittances that will be received and disbursed by the same bank. Such relaxations on cash incentive against wage earners’ remittances came into effect from July 01, 2019, according to the notification.
Earlier the central bank had relaxed the conditions for incentives on the money sent by expatriate Bangladeshis to shore up the sinking flow of remittances amid the Covid-19 pandemic.
Under the relaxations, the expatriate Bangladeshis can get 2.0 per cent incentives without showing any paper for incentives on remittance up to $5,000 or Tk 500,000. Earlier, the ceiling was Tk 150,000.
Besides, those sending more than Tk 500,000 will have two months to submit the papers instead of 15 days earlier.
Md Mahbub-ul-Alam, managing director (MD) and chief executive officer (CEO) of Islami Bank Bangladesh Limited (IBBL), welcomed the BB’s latest moves, saying that it will help boost the flow of inward remittances in the near future. IBBL’s inflow of remittances grew by 141 per cent to $3.63 billion during the July-November period of the current fiscal year (FY), 2020-21, compared to the same period of FY’20, according to the top executive of the Shariah-based leading bank of Bangladesh.
“We expect that the upward trend in inward remittance will continue by the end of this fiscal as the government has continued the 2.0 per cent incentive for remittance receipts,” the CEO noted.
Bangladesh received US$10.90 billion as remittances in the first five months of FY’21, registering an increase of more than 41 per cent, despite the Covid-19 pandemic.