Remittance and Access to Finance: Conducive Policies and Business Environment
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Transcript of Remittance and Access to Finance: Conducive Policies and Business Environment
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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.
eath,risD,6eneLt available
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.
eath,risD,6eneLt available
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