Bangladesh Bank has decided that compensation money sent from abroad by Bangladeshi expatriates, in the event of death or injury, will now qualify for government incentives.
This decision aims to boost USD inflows amid the current economic challenges.
The Foreign Exchange Policy Department (FEPD) of the central bank issued a circular on Thursday, saying that the 2.5 per cent incentive currently available on wage earners' remittances will also apply to compensation money sent from abroad.
The government raised the incentive from 2 per cent to 2.5 per cent in 2022 to encourage expatriates to remit funds through legal channels.
The circular further says that compensation received by expatriates who die or are physically injured while working abroad, whether from their employer or an insurance company, will be eligible for the incentive if the money is remitted through legal channels.
However, the source of the funds must be verified and the money must be converted into Taka as soon as it is transferred into the country’s bank accounts. The directive will take effect from the date the circular is issued, it added.
An incentive of 2 per cent was initially introduced in August 2019 to encourage wage earners to remit funds legally. Under this scheme, up to $1,500 per transaction is eligible for the incentive without requiring any documentation.
For remittances exceeding this amount, recipients must provide valid documentation such as the remitter’s passport copy, a copy of their employment letter from the foreign employer, or a certificate issued by the Bureau of Manpower, Employment and Training (BMET).
In the case of business remittances, a copy of the business licence must be submitted to the relevant bank branch to qualify for the incentive.
