Bangladesh Bank, the central bank of the country, has taken various steps to stop the flow of hundi transaction.
Introducing the system of sending remittance through mobile banking is one of such steps. In addition, they’ve provided some guidelines to stop the hundi service. The guidelines include opening MFS account of expatriates by following proper EKYC (Electronic Know Your Customer) and making contract between foreign exchange house and MFS (Mobile Financial Services) companies. These steps will pave the way to increase remittance in legal ways and mitigate dollar crisis, along with resume normal flow of export-import.
Bangladesh Bank on Tuesday issued a circular providing the permission of collecting remittance by MFS companies in legal ways. According to this circular, the MFS organizations with license of BB have to make deal with foreign online payment gateway service providers, banks, digital wallets, card schemes and aggregator payment service provider organization in order to bring the remittance into the country.
BB said the interested MFS providers have to apply to the central bank within December 31 to get permission of conducting expatriates’ earning return activities. Firstly, the money coming from the expatriates will be deposited in the account of associate organizations besides cash amount in expatriates’ mobile banking account as foreign currency. In this case, the expats have to open account in MFS companies by following proper EKYC guideline. Banks in Bangladesh will give settlement account facility to mobile service providers. As a result, the expatriates could send remittance quickly through MFS companies’ licensed under central bank.
BB hopes in this process the flow of remittance will be increased in banking channels. At present, each year Tk 75,000 crore is being siphoned to foreign lands. This money will come into the country in legal way or banking channel now as the remittance sending procedure has been made easy. It will lead to increase the reserve of foreign currency, stabilize dollar market and make balance in its transaction price and facilitate export-import.
The expatriates welcomed this initiative of BB of sending remittance through mobile banking system. Rezaur Rahman, a Bangladeshi expat living in Singapore told The Bangladesh Pratidin its necessary to leave the exchange rate of dollar on the market mechanism, in addition to making the remittance sending process easier. At present, the price of dollar in case of sending remittance through banking channel is Tk 107.50, where government incentive is 2.5%. On the other hand, in hundi the rate of dollar is Tk 114 to 115. As a result the expatriates use hudi to send remittance most of the times.
Head of corporate comminications of Bkash, Shamsuddin Haider Dalim told the Bangladesh Pratidin, “We hope, because of this initiative of BB, the expats will send remittance in a safe and legal ways by using digital platform of licensed MFS companies, which will accelerate the flow of remittance. We’ll implement all the next steps according to the directives of controlling body.”
According to economic analysts of the country, it’s the timely initiative of government in stopping hundi. As the expats is getting the chance in banking channel easily, they won’t chose hundi.
Renowned economist Dr Jamaluddin Ahmed told The Bangladesh Pratidin, “It was necessary to introduce sending remittance through mobile banking lot earlier. However, the process of sending money became much easier this time as the expats won’t face difficulty of sending it through bank. The tendency of the expats choosing hundi will be reduced a lot as the MFS companies got the job of doing it. At present 13 MFS companies are active in the country. They have more than 18 crore customers account and each day transaction of Tk 3,000 crore is being completed with it.
According to the government, the amount of remittance has been decreased in October 2022 despite the number of outgoing labor increased. In this month, the expats sent $ 152 crore, which was 7.4% less than that of previous month. The amount of gross reserve in BB is $ 34.3 billion.
@The report was published on print and online versions of The Bangladesh Pratidin on December 1, 2022 and rewritten in English by Lutful Hoque
