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The country is not just dealing with or in money which is hard-earned at individual levels overseas, but more importantly, it's value-added exchange rate at the receiving end. So you have here a cluster of operatives : the earner, sender or benefactor at the heart of the remittance process -- formal or non-formal channels as conduits -- and the beneficiary at the receiving end.
Apart from the individual remitter ,receiver and deliverer of money who each has a stake, Bangladesh Bank is involved with the process as a regulatory institution. Its very remit tasks it to ensure that the wage-earners' money is routed through the banking channels. For the paramount importance of the huge inward movement of foreign exchange consists in raising the forex reserve at the central bank. And this is considered a pillar of macro-economic stability with a self-reliant balance of payments (BOP) support available to fund the country's imports for at least six months.
One commendable feature of manpower export vis-à-vis that from the RMG sector is that the former denotes assured neat income after an initial investment has been made by an overseas appointee .In contrast, apparel exports need value-added related investments in addition to costly overheads on a sustainable basis.
In this context, it is downright concerning that the September inflow of remittance dipped by more than 39 per cent to US$853.73 million-the lowest monthly receipt in seven years. Thus we see the Bangladesh Bank upping its ante, advising the banks having exchange houses abroad to appoint agents to help bolster falling inward remittances .The BB has also asked banks to ensure mandatory opening of accounts by each outbound worker before they depart for a foreign country. The issues relating to the use of latest technologies under digital payment systems coupled with employing the mobile financial services (MFS) have come under discussion. These, if adopted (albeit, with safeguards), would quicken dispatch of money through the proper channel.
Two banks-Prime Bank and BRAC Bank -having appointed agents in the United Kingdom reported a measure of success. Prime bank says that by putting in place 10 agents in the UK, it has stepped up transactions by 36 per cent .On such evidence, the Bangladesh Bank has urged other banks to have agents to wean away business from the Hundi operators.
We share the concern of experts over any randomized appointment of agents so as to avoid anti-money laundering and terror-financing risks. Actually, we would have to mount constant monitoring of a wider agency system if put it in place lest intruders creep in under any pretence of legitimacy.
In an earlier write-up, we had recommended a wider and deeper reach to the wage-earners implying that individual Hundi operatives need to be outsmarted. As a matter of fact, the bank branches and their outfits in whatever shape and form they might be, should consider themselves as being competitors to the Hundi pushers, not just an alternative option.
Accordingly, the requipped banking channels with more exchange houses and representatives would have to offer good exchange rate and speedy deliveries, something the Hundi operatives have been dangling to their potential customers . The informal route is unencumbered with procedures, money delivery is just a phone call away and it is incentivised by open market rate of foreign currencies.
In other words , building awareness among the wage-earners and their beneficiaries about the fight against money laundering, making remittance hassle-free and user-friendly and, above all, subsidising remittance at the operational level (the finance minister having dropped a hint at that),could be the ways to making a difference in the situation.