Half of remittance comes through hundi, says Kamal

Remittance inflow through the legal channel and hundi – an illegal method of fund transfer – are still almost the same in Bangladesh, said AHM Mustafa Kamal on Wednesday.

Speaking to reporters after attending meetings of the cabinet committee on public purchase economic affairs, he said, “When I was the planning minister, I conducted a study.

“It showed that Bangladesh was receiving 51 per cent remittance through the official channel, and 49 per cent through hundi. I think this trend continues till this very day.”

When asked whether the tendency to use hundi has gone up further, the finance minister said, “We all want Bangladesh to receive remittance through the official channel. Money coming in legally has records everywhere, and the process ensures accountability.

“There is no legal basis for money coming in through hundi. It then becomes black money, which lacks explanation and paper trail. Those who are gradually increasing their wealth with the money will not be able to provide an explanation to any income tax or regulatory authorities.”

Responding to a question about corruption and its impact on foreign direct investment (FDI), Mustafa Kamal said, “FDI is on the rise in Bangladesh. I do not have data on the amount of corruption in the country, but it is true that corruption is an issue here.

“We have to halt the laundering of money by those who engage in this malpractice by inflating the volume or value of imported goods.”

He added, “The ongoing inflation is being caused by a hike in goods prices. The inflation in Europe was 5.1 per cent in January, which reached 7.4 per cent in April and 8.9 per cent in July. Inflation is going up all across Europe – rising as high as 75 per cent.

“Inflation is rising because of imports from those countries.”

Responding to another question, Kamal said, “Bangladesh does not have the opportunity to raise the policy interest rate to rein in inflation. This is why this issue is being tackled through various policy measures – such as hiking duty to discourage imports and raising LC margin.”

At Wednesday’s meeting, the cabinet committee on public purchase approved one proposal from the commerce ministry to buy 33,000 tonnes of soybean oil through direct procurement method, and two proposals from the industries ministry to buy 60,000 tonnes of urea fertiliser.

These procurements will cost Tk 764.30 crore.

The same day, the cabinet committee on economic affairs recommended a proposal by the industries ministry for procuring 3.6 lakh tonnes of urea from UAE, and another proposal from the agriculture ministry for importing 1 lakh muriate of potash (MoP) through the Bangladesh Agricultural Development Corporation or (BADC).