Bangladesh Bank has unveiled a comprehensive initiative aimed at curbing the cost of remittances sent by expatriates while boosting the overall inflow of foreign remittances into the country. Under the new directive, commercial banks are required to submit detailed information on every remittance transaction to the central bank, enabling closer monitoring and more effective cost-control measures.
The central bank has developed two separate reporting templates for this purpose. According to the circular, banks must provide daily transaction details by 12:00 pm the following day. The initiative is set to take effect from 1 January, signalling a significant step in the regulatory oversight of remittance flows.
Currently, the cost of sending money from abroad is inflated due to a combination of fees, service charges, and taxes imposed by foreign banks and authorised exchange houses. Reports from the World Bank indicate that remittance expenses have been on the rise in Bangladesh and several other countries, making it more expensive for expatriates to send money to their families. By systematically collecting detailed transaction data, Bangladesh Bank aims to devise strategies that will reduce the financial burden on senders.
Commercial banks are required to furnish comprehensive details for each remittance transaction, including the date of the transaction, the sending bank or exchange house, the remittance method used, the amount sent, applicable incentives, exchange rates, fees, value-added tax (VAT), other associated costs, and the total transaction cost. Additionally, banks must maintain and regularly update an accurate list of foreign exchange houses and partner banks.
Authorities emphasise that this initiative is expected not only to lower remittance costs for expatriates but also to harmonise exchange rates across different channels, providing more consistent and transparent pricing. Analysts suggest that such measures could lead to increased inflows of remittances, which are a vital source of foreign currency for Bangladesh and an essential contributor to household income.
Remittance Initiative at a Glance
| Topic | Details |
|---|---|
| Initiative | Reduce remittance costs and collect transaction data |
| Authority | Bangladesh Bank |
| Effective Date | 1 January |
| Data Required | Transaction date, bank/exchange house, amount, fee, VAT, total cost |
| Objective | Control remittance costs; increase remittance inflow |
This move is widely seen as a strategic step by Bangladesh Bank to enhance transparency, improve financial oversight, and ensure that expatriates can send funds home more affordably and efficiently.