Cash subsidy or 2% incentive does not apply to investments in wage-earner development bond, US dollar investment bond and US dollar premium bond.
The Bangladesh Bank clarified the issue on Wednesday as investors were confused, many going to banks demanding incentives on the three bond types, like the one on remittance.
Earlier, the central bank sought the opinion of the Finance Ministry on the matter. The Ministry said that an investment in these three types of bonds was not eligible for a cash subsidy.
Then the Bangladesh Bank issued a circular saying that cash incentives or assistance are not applicable to investments in wage-earner development bond, US dollar investment bond and US dollar premium bonds – purchased in another individual's name and/or in one's own name.
The government introduced the cash incentive of 2% against inward remittance to encourage it through legal channels, for the fiscal year (FY) 2019-20.
And it allocated Tk3,060 crore for this incentive for the fiscal year.
The inward remittance flow was $18.24 billion in FY20 after the incentive was introduced.
So, the government has continued to pay 2% cash subsidy on remittance in the FY21.
Officials at the central bank's Foreign Exchange Policy Department were informed that many customers recently had arguments with bank officials – assuming that there would be 2% incentives on wage-earner development bond, US dollar investment bond and US dollar premium bond.
A senior official of the department told The Business Standard, "We asked for the opinion of the Finance Ministry to resolve the confusion and conveyed their guidance to the banks in the circular."