Proper utilization of mobile financial services (MFS) to receive remittance could be one of the easiest ways to overcome the foreign exchange crisis as it will increase the remittance inflow because of easy process, said experts on Wednesday.
Initiatives should be taken to ensure that money sent through legal channels reaches the beneficiary safely and instantly along with making the remittance sending process significantly easier.
In this case, digital platforms can be the best medium, said the speakers.
The seminar titled ‘Remittance Through Legal Channel: Prospects of Digital Platform’ was organized by Economic Reporters’ Forum (ERF) at the office of the organization in Purana Paltan in the capital.
M A Mannan, Honorable Minister of the Ministry of Planning, was the chief guest of the seminar. Renowned economists, bankers and industry experts put forward various recommendations at the seminar.
Planning Minister M A Mannan said to the masses of our country who receive remittances, there is a kind of social distance regarding transactions by going to the bank.
As a result, they find it relatively easier to receive remittances from their homes even via illegal channels. Remittances cannot be increased unless the distance between expatriates and the legal channels is reduced.
The government is working on it. Digital platforms can play a pivotal role in this regard, he said.
Transactions with foreign countries are closed for three days a week in the banking channel. For this reason, hundi is being preferred as a better transaction route.
The government wants to break these traditional barriers and start a new trend. These issues must be dealt with. The Ministry of Finance and Bangladesh Bank are working on this, the minister observed.
Ahsan H Mansoor, Executive Director of Policy Research Institute (PRI), said to increase remittances through legal channels, the dollar market needs to be balanced.
Migrant workers are more inclined to send remittances via hundi when the dollar exchange rate in both legal and illegal channels is high.
Through various awareness programmes, they can be motivated to send dollars through legal channels. Besides, attention should be paid in increasing digital services.
Dr Bazlul H Khondker, Professor of Economics of the Department of Dhaka University and Chairman of SANEM presented the keynote at the seminar.
He said remitters are choosing hundi because of the convenience of sending money quickly and at a much lower cost. It will be possible to reduce the cost and time by half if digital platforms including MFS are used as legal channel.
“If the received remittance is cashed out, we will still not be able to maximize the benefit. Rather, if we can strengthen the ecosystem and create ways to use the digital money digitally, the country's economy will be stronger. For this, digital financial services should be patronized in the country,” he said.
Masrur Reaz, Chairman of Policy Exchange, said remittance can be brought quickly through digital channels. There is no alternative to using digital platforms to boost remittance inflow.
Md Iskandar Mia, former Executive Director and former Deputy Head of Bangladesh Financial Intelligence Unit (BFIU), said necessary initiatives should be taken to bring remittance of the illegal migrant workers through legal channel.
For that, engaging MFS agents can be a solution. It is also important to take steps to stop money laundering.
Sheikh Md Monirul Islam (Retd), Chief External and Corporate Affairs Officer of bKash, said, bKash disburses the remittances instantly to the dear ones of the expatriates. Currently, remittances sent by expatriates from more than 70 countries are entering Bangladesh through 75 Money Transfer Organizations (MTO) via settlement in 12 commercial banks.
In 2021, Tk 2, 427crore remittances were disbursed through bKash. At the end of this year, it is expected to reach around Tk 4, 000crore, he said.
