Under the worst-case scenario of Covid-19 pandemic impact, Bangladesh’s remittances could fall by 27.8 percent in 2020, ADB says
Bangladesh's inward remittance flow could rise to $24-25 billion in the fiscal year (FY) 2020-21.
Finance Minister AHM Mustafa Kamal said this on Thursday after inaugurating the digital transaction services between Agrani Bank and bKash.
Mustafa Kamal said digital financial services have made banking transactions easier.
"People's trust in the service has increased a lot. Now remittance senders can transfer money more quickly. Earlier, they would raise many questions about the banking service."
Financial Institution Division Senior Secretary Md Asadul Islam, Bangladesh Bank Deputy Governor Ahmed Jamal; Agrani Bank Chairman Dr Zaid Bakht, Managing Director Mohammad Shams-Ul Islam, and bKash Chief Executive Officer Kamal Quadir were also present at the virtual programme.
Zaid Bakht talked about the finance minister's initiative of the launching of 2 percent cash incentive on remittance.
In FY20, the country received $18.21 billion remittance – highest in a fiscal year.
In July, the first month of the current fiscal year, the country received $2.60 billion remittance which is also a record remittance for a signal month.
The country's foreign currency reserve is rising with the growth in remittance inflow. On August 17, forex reserves crossed $38.15 billion for the first time.
Despite all of these positive trends, experts held a negative view about remittance and forex reserve growth as Covid-19 had recently brought many expatriates home.
Policy Research Institute Executive Director Ahsan H Mansur told The Business Standard, "The current inward remittance flow is not a real one. Many expatriates are waiting to return home soon. So, they are sending their savings."
Around 2.5 lakh migrants have returned home amid the pandemic, according to the Brac Migration Programme.
In the monetary policy statement for FY21, the central bank said, "Although there are signs of gradual improvements in people's movement and economic activities, the uncertain length and depth of the Covid-19 pandemic in the coming days is being considered the number one risk factor in attaining monetary programme objectives of FY21."
Aggravation in the global recessionary economic condition due to lingering of Covid-19 along with the volatilities in oil price and ongoing geopolitical tensions in the Middle-East might have a negative impact on future export earnings and wage earners' remittance inflows to Bangladesh, the central bank also said.
And the Asian Development Bank (ADB) already said, under the worst-case scenario of Covid-19 pandemic impact, Bangladesh's remittances could fall by 27.8 percent in 2020, as job losses mounted and employers trimmed payrolls.
However, Agrani Bank customers can now make their banking transactions through bKash app.
Also, customers of the state-own bank can easily add their account credentials to the bKash app following a few simple steps and enjoy all the services anytime, such paying utility bills, buying tickets, making payments, recharging mobiles, sending money and making cashouts.
They will also be able to transfer money to their Agrani Bank account from bKash anytime and avail services like payment of instalments of deposit scheme or loans from anywhere.
Kamal Quadir said, "Using our customer-friendly digital transaction technology, banks can deliver services to the customers more innovatively. This joint venture of bKash and Agrani Bank is a significant step towards effective financial inclusion."