Bangladesh Bank encourages remittances to boost forex

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| Updated:
May 24, 2022 8:45:41 a.m.


Bangladesh Bank has withdrawn the provision on mandatory submission of documents to get an incentive against incoming remittances of USD 5,000 or Tk 50,0000 and above, with the aim of encouraging greater inflow of remittances.

Kazi Rafiqul Hassan, director general of the foreign exchange department, issued a circular on Monday removing the obligation to present documents for an indefinite period.

As a result, senders will receive an instant 2.5% incentive for any transfer amount sent through the formal channel, without submitting documents to foreign exchange offices.

The BB has asked all scheduled banks to implement the decision from May 23 (Monday), UNB reports.

In the current fiscal year, Bangladesh has received $18.62 billion in remittances so far.

In the last fiscal year 21, Bangladesh received $24.77 billion in remittances, so far the record in one fiscal year.

Industry insiders said the flow of inbound remittances declined as hundi and other illegal channels became active after the pandemic-induced travel ban was lifted.

The government is encouraging increased flows of remittances in the legal format as the demand for foreign currency has increased due to import payments.

Bangladesh is witnessing increasing importation of capital goods, industrial raw materials, LPG fuel oil and commodities which inflate import payments.

Also, deferred payment for LCs made during the severe pandemic must be paid now.

According to the BB, over $68 billion of LCs were opened in the first 9 months of the current fiscal year 2021-22.

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