The Bangladesh Bank has withdrawn the provision on mandatory submission of documents to obtain an incentive against incoming remittances of $5,000 or Tk 50,0000 and above, with the aim of encouraging greater inflow of funds.
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 Bangladesh Bank has asked all scheduled banks to implement the decision from Monday.
In the current fiscal year, Bangladesh has so far received $18.62 billion in remittances.
In the last fiscal year 21, Bangladesh received $24.77 billion in remittances, so far the record in a 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 the increase in the flow of remittances in legal format, as the demand for foreign currency has increased due to import payments.
Bangladesh is witnessing an increase in imports 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 Bangladesh Bank, over $68 billion of LCs were opened in the first 9 months of the current fiscal year 2021-22.