The Bangladesh Bank has further relaxed conditions for getting a 2% cash incentive against foreign remittance worth above $5000 or Tk5 lakh sent through the banking channel.
Expatriate Bangladeshis now do not have to submit any document for remitting this amount. However, it is still mandatory for recipients to produce necessary documents before the remittance provider bank.
Earlier, cash incentive for any amount more than $5,000 was subject to providing some documents from both remittance senders and receivers.
The central bank's Foreign Exchange Policy Department issued a circular in this regard on Wednesday.
Taufiqul Islam Khan, a senior research fellow at the Centre for Policy Dialogue (CPD), told The Business Standard that the new decision will encourage expatriate Bangladeshis to send home more remittances.
Noting that migrant workers in many countries could not collect necessary papers properly because of the obligation to send the documents from both sides, he said the new decision has also made it easier to send remittances.
Currently, remittance worth up to $5000 or Tk5 lakh does not require any documents to receive incentive.
In case of sending more than this amount of remittance, the sender needs to produce any of the copies of worker permit, resident permit, business licence, and the clearance of the Bureau of Manpower, Employment and Training (BMET) along with a copy of his passport to the remittance receiver bank in the country through a foreign exchange house to claim incentives.
On the other hand, the recipient has to submit similar documents to receive the remittance.
Incentives are available only against remittances sent by expatriate Bangladeshis. This facility does not apply to any foreign national or organisation sending remittances to Bangladesh.
In the current financial year, Tk3,060 crore has been allocated for remittance incentives. The remittance inflow is increasing on the back of a 2% cash incentive and the narrowing of illegal channels amid Covid-19.
In the five months from July to November this year, remittances were 41% higher than in the same period last year. Foreign exchange reserves have exceeded the $40 billion mark as remittance inflows have increased and import costs have declined.