Banks to initiate special 'package programmes' to increase remittance flow: FM

Banks will initiate special 'package programmes' to increase the flow of remittances over banking channels, said Finance Minister AHM Mustafa Kamal in his FY2021-2022 budget speech on Thursday.

Regarding the special 'package programmes', deputy managing director of Islami Bank Bangladesh Limited, Md Mosharraf Hossain, said, "According to the budget announcement of the finance minister, Bangladesh Bank will give guidelines on what type of special programmes will be launched by the banks. We will come to a decision according to the guidelines."

"However, we have been giving an additional 1% incentive over and above the 2% cash incentive for clients who have agent banking accounts at our bank. If a client remitts through his agent banking account, he gets a 3% cash incentive in total," he added.  

With a 40% growth over the 11 month July-May period of fiscal 2020-2021, the country received a record $22.84 billion in remittances according to Bangladesh Bank, despite the coronavirus pandemic ravaging economies across the globe.

By comparison, in the first 11 months of FY 2019-20, remittance inflows amounted to $16.37 billion, while inward remittance for the year stood at $18.21 billion, an 11% year on year growth.

"This remarkable success in remittances has brought relief for us, especially during the Covid-19 pandemic when we are going through uncertainty in exports due to the global economic downturn," said the finance minister in his speech.

"This enviable growth in remittances has been possible, largely due to the continuation of cash incentives at the rate of 2% for remittances from Bangladeshis abroad, incentives announced by the Hon'ble Prime Minister and the simplification of the process of channeling remittances," the minister added.

Considering the ground reality, the finance minister proposed continuing the cash incentive program, at the rate of 2% in the next fiscal year as well.