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Eight proposals to boost remittance from Malaysia

Hamimur Rahman Waliullah
07 Jun 2023 00:00:00 | Update: 07 Jun 2023 00:03:39
Eight proposals to boost remittance from Malaysia
In May, Bangladeshi expatriates sent $1.69 billion as remittance, down from $1.88 billion recorded at the same month last year– TBP Photo

Bangladeshi High Commissioner to Malaysia Md Golam Sarwar has made eight proposals to increase remittance flow from Malaysia after the country slipped to 7th position from 5th among the top 30 remittance potential countries for Bangladesh.

The high commissioner made the proposals in a letter sent to Bangladesh Bank claiming that implementing the proposals Bangladesh can raise remittance from Malaysia.

In the proposals, Sarwar urged to raise stimulus for the remitter to 5 per cent from the existing 2.50 per cent, rationalise the exchange rate of dollars, and increase benefit against bonds.

Besides, he proposed strict monitoring of mobile money transfers within the country, making bank account mandatory in the name of expatriates, providing foreign employment loans, proper publicity and a ban on gold bars.

The central bank sent the letter to the National Board of Revenue (NBR) mentioning that banning gold bar is under the NBR’s jurisdiction.

Currently, there are around 10 lakh workers in Malaysia.

According to a central bank report, expatriates from Malaysia sent $1.23 billion remittance in FY2019-20. In the following fiscal year, it went up to $2.01 billion. However, it again declined to $1.02 billion in FY2021-22.

“Even, the declining trend continues in the incumbent financial year too,” said the high commissioner.

Besides, remittance sent by expatriates sharply rose by 36.10 per cent to $24.78 billion in FY 2020-21 compared to the same period of the previous fiscal year.

He said, “Though the number of Bangladeshi workers increased significantly in the foreign countries, the remittance flow declined by 15.14 per cent to $21.03 billion in 2021-22.”

During July to May of this FY, remittance earnings stood at $19.41 billion, up from $19.19 billion in the same period of last year. But, Bangladesh’s remittance inflow fell by 10 per cent this May on year-on-year basis, despite the rising rate of USD for remitters.

In May, Bangladeshi expatriates sent $1.69 billion as remittance, down from $1.88 billion recorded at the same month last year, shows latest data from the Bangladesh Bank. However, May’s figure is slightly higher than the previous month, which was $1.68 billion in April.

Behind the gradual decline in remittance, the sending of remittances through hundi is responsible, claimed the high commissioner.

Sarwar suggested that the government will provide 2.5 per cent incentive as per the existing system and the remaining 2.5 per cent can be deposited in the remitter’s bank account like a provident fund and later, when the remitter returns to Bangladesh, it will be paid with dividends.

He thinks that expatriates will be encouraged to send money through banking channels thinking about financial security in the future.

The high commissioner said that the exchange rate of dollar has to be fixed at such a rate that the remitters get money equal to, or higher than, the hundi rate in the country. If necessary, the dollar rate has to be fixed country wise.

In the case of Wage Earner Development Bond (WEDB), he urged to include facility through passports instead of mandatorily submission of NID.

As the bonds are purchased through conversion of foreign currency into taka, he thinks that it is necessary to withdraw the upper limit of bond purchase and increase the bond interest or dividend rate.

In the proposals, he argued that monitoring of mobile money transfer should be strengthened to control hundi transactions as a large part of the money sent to the country through hundi is distributed through the mobile banking channel.

Keeping daily or monthly transaction limit through mobile financial services as low as possible and imposing criminal penalties against those involved in disbursement of illegal funds are must to curb such illegal acts, he said.