Remittance and Access to Finance: Conducive Policies and Business Environment

8/9/2019 Remittance and Access to Finance: Conducive Policies and Business Environment

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‘Remittance & Access to

Finance : Conducive Policies andBusiness Environment

18 March 2015

Md. Ahsan Ullah

Executive DirectorBangladesh Bank


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Introduction


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A Snashot

Bangladesh is a small country in sizehaving a big population of about 160millions.

round ! millions of them spread all over

the "orld "ho are popularly kno"n as #on$esident Bangladeshis %#$Bs&.

'ut of such a big number of #$Bs( most ofthem are in rabian countries( largely

unskilled marginal)small farmers comingfrom rural areas.

*ost of the #$Bs in Europe and +, are

i kill d d kill d


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A Snashot

$emittances ontribution is over 10/ to D onan average %2 years&.

$emittances are rendering B' support to reducetrade gap.

#$Bs have made signi3cant socioeconomicimpact on community as "ell as household levelsthrough 4

improved standard of living(

higher investment in children5s education(

increased spending in healthcare and social security( higher investment in income generating activities like ,*Es and

other agro processing activities


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!a"e Remittance Flo#

$earRemittance %In million

US' (ro#th)**+,*- /+/.)0 1+.12

)**-,*3 +/*1.// )+.4/2

)**3,*4 -04/.+4 )+.-*2

)**4,*/ 401+.4/ ).02

)**/,*0 03/0.)3 )).+)2

)**0,1* 1*0/4.+* 1.+*2

)*1*,11 113-*.) 3.*2

)*11,1) 1)/+.+) 1*.)+2

)*1),1 1++31.1+ 1).3*2)*1,1+ 1+))/.1 ,1.312

)*1+,1-%till ebruary&

050*0.* ,


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!a"e Remittance Flo#%million US'

,

)5***

+5***

35***

/5***

1*5***

1)5***

1+5***

135***


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Remittance 67 Re"ion %million US'

0

1(000

7(000

8(000

9(000

2(000

6(000

:(000

;(000

!(000

10(000

0

1(000

7(000

8(000

9(000

2(000

6(000

:(000

)*1+

'thers< 91/

*iddle East< 2!/


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!a"e Earners8 Remittance 9)*1+ %million US'

SA; ))2

UAE; 102

u#ait; 42USA; 132

U; 32

Mala7sia; /2


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Remittance to Macroeconomic =aria6les

=he trends in share of remittance to macroeconomic variable points that

it is highly bene3cial for Bangladesh economy in upholding domesticdemand in the recessionary global environment.

• Enhancing availability of borro"ing resources for both thegovernment and the private sector( and augmenting foreignexchange reserve cushion.

$ear Remit.>(P Remit.>E?ort Remit.>Imort Remittance>Aid Remit.>FI

1!;1-;7 1.!8 28.:0 19.1! 88.72

1!!1-!7 7.62 97.28 79.9! 27.67 711!!.72

1!!9-!2 8.16 89.9! 70.28 6;.;: 1!!60.20

1!!!-00 9.19 88.;! 72.:6 187.12 20;.!6

7009-02 6.8: 99.9: 87.97 798.92 ;1;1.09

700;-0! 10.;9 67.72 9:.:2 :1;.;; 107!.62

700!->10 10.!; 6:.;0 21.8: 208.26 1:7:.27

7010-11 10.7; 20.!6 82.90 69:.;8 19;2.22

7017-18 11.09 28.!: 97.:0 210.0: ;80.:1

7018-19 ;.17 9:.97 8;.60 9:0.9; !10.62

=able? =rends in $emittances as ercentage of key *acroeconomic @ariables

o ec en s o


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o ec en s oRemittances%US 6illion5 )*1+e'

,ource? Aorld Bank sta calculation based on data from C* Balance of ayments ,tatistics earbooksand data releases fromcentral banks( national statistical agencies( and Aorld Bank country desks.

413+

)/)+

)11/ 14 1-

11 0

/th


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Remittance costs

=otal cost of sending 700( including fees and exchange rate

margins %/&

,ource? $emittance rices Aorld"ide( the AorldBank.


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Remittance Costs

=otal average cost of sending about 700 along key

corridors in ,outh sia %including fees and exchange ratemargins&

,ource? $emittance rices Aorld"ide( the AorldBank.


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RBs & Remittance Behavior

Male; 042

Female; 2

Parents; +-2Souse; --2

(ender Reciient


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RBs & Remittance Behavior

Sent; /+2

Saved; 132

Food Item; 2

on,Food Items; 2

ura6les &


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Savin"s Behaviour o RBs

Recent ational surve7 on remittance%)*1' sho#s 9 *ore than half of the remittance receiving

households %26.!6/& saved a part of theremittance they have received during last oneyear.

bout ;9.01/ of the total remittance saverskept their savings in banks in dierent forms?

Mode

,avings ccount 66.0:/

Bond urchase 2.:!/

D, :.18/

=ime Deposits 2.07/

Poular Mode o Sendin"


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Poular Mode o Sendin"Remittance BanDin" channel is the most oular

and #idel7 used s7stem or sendin"remittance in Ban"ladesh %43.*/2&.

Even though 10.09/ use Fundi for sending

remittance.Mode 2!estern Union 3./4

Mone7"ram 1.3-

Post


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RemittanceArran"ements

um6er oEGective ra#in"

Arran"ements

1*33H

& man7 more

with

!orld#ide ra#in"


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!orld#ide ra#in"Arran"ements

Countr7

J oA

Countr7

J oA

Countr7

J oA

+E 72! +, 178 *alaysia 29

'man !; +G !9 ,ingapore 12

Gu"ait !1 Ctaly 12 *ulti-country

:6

Hatar :2 anada 1;

G, 2: ustralia 1:

Bahrain 9: ,pain ; Iordan 8 reece 6

Brunei 1

&

m a n 7 m o

r e

# i n d o # s I

Ban"ladeshi BanDs8


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Ban"ladeshi BanDs8


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Remittance istri6utionet#orDs

Mo6ile BanDin"

)/ BanDs(


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Measures taDen to com6atundi > a#ala

Reasons o undi>a#ala Polic7 Suort romBB

Jack of Banking and 3nancialservices in remote areas

- 1?1 +rban-$ural Branch'pening olicy

- Distribution #et"ork like

#'( *obile BankingFigh ees and charges offormal transfer

- $emittance rrangement"ith *oney =ransferompanies

- Exchange Fouse

Establishment- Cncreasing ompetition

,peed of =ransfer - =ime limit %max 7 "orkingDays&

Measures taDen to com6at


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Measures taDen to com6atundi > a#ala

Reasons oundi>a#ala

Polic7 Suort romBB

Discrepencies bet"eenoKcial and unoKcialexchange rates

- ,tability of oreignExchange *arket

DiKculties faced by theillegal immigrants in openingbank accounts abroad

- $emittance rrangementfor small size remittance

*oney landering( terrorism3nancing and tax evasion

- #o compromise


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Investment Facilities or RBs

oreign currency deposits in the #on-resident

oreign urrency %#D& account Aage Earners5 Development Bond

+, Dollar Cnvestment Bond

+, Dollar remium Bond Cnvestment in ,hares L ,ecurities through

#C=

Huota for overnment lot

10 percent reserved Muota for non-residentBangladeshis in primary shares %C'&

Cnvestment in EN

!a"e Earners8 eveloment


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!a"e Earners evelomentBond %!EB' Bond enomination : =k. 72(000< =k.

20(000< =k.1(00(000< =k. 7(00(000< =k.2(00(000< =k. 10(00(000 and =k. 20(00(000

Maturit7 Period : 02%3ve& years

Interest Rate : 17/ on maturity %in BD=& Bond%s& can be purchased "ithout opening

of .. ccount

CIP status if investment in Aage Earners5Development Bond is BD= ; rore or above.

eath,risD,6eneLt available


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US ollar Investment Bond

Bond enomination : +, 200( +, 1(000( +,

2(000( +, 10(000 and +, 20(000 Maturit7 Period : 08%three& years

Interest Rate : 6.2/ on *aturity %in +, &

Eli"i6le Purchaser : Bangladeshi #ationalsresiding abroad and Bangladeshi origin oreign#ationals residing abroad

Bond%s& can be purchased "ithout opening of ..ccount

CIP status if investment in +, Dollar CnvestmentBond is +,D 1 million or above.


US ll P i B d


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US ollar Premium Bond

Bangladesh overnment ,avings Bond issued in

eMuivalent +.,. Dollar against the foreignexchange remitted by the Aage Earners

Bond enomination : +, 200( +, 1(000( +, 2(000( +, 10(000 and +, 20(000

Maturit7 Period : 8%three& years Interest Rate : :.2/ on *aturity %in +, &

Eli"i6le Purchaser : Bangladeshi #ationalsresiding abroad and Bangladeshi origin oreign

#ationals residing abroad CIP status if investment in +, Dollar remium

Bond is +,D 1 million or above.


S ti E i t


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Suortive Environment

overnment5s olicy is to ensure inclusive

economic gro"th.

Cn line "ith the overnment policy( BB hasincluded 3nancial inclusion in it5s monetary

policy statement for inclusive gro"th. =he o6ective o Financial Inclusion is

to bring the unbanked) lo"income)poor)"eaker section of the

population under the umbrella of formal3nancial environment at an aordable cost.

S ti E i t


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Suortive Environment

overnment5s vision is ODigital Bangladesh? 70715

Digitization of the 3nancial sector "ith advanced

infrastructure

ully automated online settlement and electronic

fund transfers on board.

vailability of ell phone and ,C* cards at

aordable lo" cost.

*inimum subscription for opening bank account for

the farmers in the rural areas.

ovt. established C=-enabled Union Inormation

and Services Centres %UISC' operating at all

9(29: +nion arishads %+( lo"est tier of local

overnment of the countr .

B Lt Fi i l I l i


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BeneLts o Financial Inclusion

*obile inancial ,ervices %*,&.10 taka ccounts for the farmers.

,chool Banking.

gent Banking

mong these *, and gent Banking arefully digitized 3nancial services

Use o Mo6ile Phone


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Use o Mo6ile Phone


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31

Around 3/2 o the

countr7Ns oulationas Active su6scri6ers

createdan unrecedented

oortunit7

to deliver 6asic Lnancialservices

usin" the mo6ile hones

Re"ulator7 Frame#orD


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Re"ulator7 Frame#orD

Re"ulations 9 Puidelines on*obile inancial ,ervices for theBanksQ issued in ,eptember 7011andamended in December 7011.

Business model9 Bangladesh follo"sBank-led model.

istri6ution net#orDs 9 Banks toappoint credible agents)partners fordelivering *, to the unbankedpopulation cost-eectively utilizing*#')#'5s countr "ide covera e

BanDers8 (ain rom MFS


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BanDers8 (ain rom MFS

Cncreased number of customers"hich ensures- #e" source of deposit #e" source of income

ountry"ide coverage at aminimum operating cost.

Customers8 (ain


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Customers8 (ain

or the ustomers( the *obileinancial ,ervices has thefollo"ing bene3ts? ,afe deposit of their money and

earning interest on it. Daily transactions in the account on

79): basis.

,ending and receiving localremittance instantly.

$eceiving in"ard foreign remittance

Current status o MFS in Ban"ladesh


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Current status o MFS in Ban"ladesh

#o. of Banks got #'-7; #o. of Banks Jaunched *, -1! #o. of agents-290(!;9 #o of registered customers- 72 million verage no. of transactions)day-7.9

million verage volume of =ransaction) day-

=k8.9! Billion

%#ote 1+,DR around =k::.;0&

BanDs 67 the RBs


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BanDs 67 the RBs

SecialiOed BanD or the


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RBs

Mission:%1& roviding credit facility to the

expected migrants%7& Felping the returnee migrants

for employment L investment%8& Encouraging #$Bs to send

remittance to the countrythrough Muick and less costlyformal channel.


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Forei"n E?chan"e Reserve %million


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" "US'

0

2(000

10(000

12(000

70(000

72(000

or the 3rst time BB S reserve hits US ) 6illion

marD . Figh S $eserve is the result of impressive remittance

gro"th. =he S $eserve is no" eMuivalent to almost 4 months

imort a7ment.

Recent Achievements


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Recent Achievements

Macro Indicators )**0 )*1+ Chan"e

D ro"th $ate %& 2.:9/ 6.17/ T0.8;/

S $eserve %in billion +,D& :.9: 77.81 T1!!/oreign $emittance %in

billion +,D&!.6! 19.78 T9:/

B' %in million +,D& 702; 29;8 166/

overty Feadcount $atio 81.2/ %7010& 79.17/ -:.8;/

Due to 3nancial inclusion gro"th initiatives(

Bangladesh has achieved notable developmentdespite lingering global 3nancial slo"do"n.

Consumer Protection Frame#orD


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Consumer Protection Frame#orD

'ne can e-mail to us at 66.cic66.or".6d

'r

complain to ax ?00;;-07-!2807:8

'r

complain using the electronic complaint

form? htt:>>###.66.or".6d>comlain6o?>comlain6o?.h

'r

complain against Banks)inancial Cnstitutions to thefollo"ing address?

(eneral Mana"erinancial Cntegrity L ustomer ,ervices DepartmentBangladesh Bank( Fead 'Kce(7nd nnex Building %1: Voor&*otiWheel( Dhaka-1000( Bangladesh.

!a7 or#ard


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!a7 or#ard

=aking initiatives to increase the number of semi-

skilled and skilled "orkers instead of presentunskilled "orkers.

or this purpose( Bureau of *anpo"er (Employment and =raining %B*E=& has taken amassive program for skill development.

Exploring ne" labor markets abroad in addition tothe existing markets.

$educing cost of sending "orkers abroad( e.g.(7 L side by side private recruiting agencies.

overnment is planning to Voat sovereign bondtargeting the #$Bs.


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=hankyou

Md. Ahsan UllahExecutive DirectorBangladesh Bank

Documents

Remittance and Access to Finance: Conducive Policies and Business Environment