Bangladesh Bank moves to encourage greater flow of remittance to boost forex

Bangladesh Bank has withdrawn the provision of mandatory submission of documents for getting incentive against inward remittance of USD $ 5000 or Tk50, 0000 and upward, in a move to encourage greater inflow of remittance.

Kazi Rafiqul Hassan, general manager, foreign exchange department issued a circular on Monday withdrawing the document submission obligation for an indefinite period.

As a result, the remitters will get a 2.5 per cent instant incentive for any amount of remittance sent in the formal channel, without submitting documents to the foreign exchange houses abroad, reports UNB.

The BB asked all the scheduled banks to execute the decision from May 23 (Monday). In the current fiscal year Bangladesh so far received $18.62 billion in remittance.

In the last FY 21, Bangladesh received $24.77 billion remittance, so far the record high in a fiscal year. The sector insiders said the inward remittance flow has decreased as the hundi and other illegal channels became active after withdrawing pandemic-induced travel ban.

The government encourages increased flow of remittance in the legal format as demand for foreign currency has grown due to meet import payments. Bangladesh is witnessing an increasing import of capital machinery, industrial raw-materials, LPG-fuel oil and commodities swelling the import payments.

Besides, the deferred payment of LCs done during the severe pandemic is scheduled for payment now. According to the BB over $68 billion worth of LCs opened in the first 9 months of current FY 2021-22.