Tk1,013cr project aims to boost remittance inflows

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The expatriates' welfare and overseas employment ministry has taken an initiative to implement a new project worth about Tk1,013 crore to increase remittance inflows into the country.

Titled "Leveraging Remittances in Bangladesh," the project will be implemented through three main components: training family members of remittance recipients, simplifying remittance transfer processes, and reducing the cost of sending remittances.

Infograph: TBS

According to relevant sources, under the project, around 3,41,000 family members in 31 districts will receive training. The objective is to raise awareness among remittance recipients so that the money sent by expatriates is used properly and contributes positively to both households and the national economy. An estimated Tk440.82 crore has been proposed for training.

The project also aims to make remittance transfers easier and hassle-free for expatriates. Plans include expanding banking facilities and ensuring more accessible services through reliable financial institutions. About Tk300 crore has been allocated for this component.

Another key aspect of the project is reducing remittance transfer costs. Often, expatriates have to pay fees or charges to send money home. A separate allocation of Tk250 crore has been proposed to lower these costs.

A remittance sector expert said such an initiative is timely and important, noting that raising awareness among expatriate families is crucial, as remittances are often not used efficiently.

The Wage Earners' Welfare Board, under the ministry, will implement the project, with a target to complete it within three years. Before that, efforts are underway to secure a loan from the Asian Development Bank (ADB). A preliminary project proposal has already been sent to the Planning Commission for policy approval.

Once approved, the proposal will be forwarded through the Economic Relations Division (ERD) to development partners to secure foreign financing.

Officials said the plan is not only to make expatriates aware but also their family members, so that remittances are utilised effectively. 

They explained that if remittance money is wasted on unnecessary or unproductive spending, it does not reflect the true value of the hard-earned income sent from abroad. The training will therefore focus on responsible spending and long-term financial benefits.

Another major objective is to ensure that expatriates can send money home easily and at lower cost through formal banking channels. Many expatriates face difficulties due to complex procedures. The project will simplify these processes, ensure fast and reliable services through banks, and introduce new initiatives. Institutions such as Probashi Kallyan Bank and other reliable banks will be involved.

Officials added that the project is currently awaiting approval from the Planning Commission. The government is trying to secure ADB financing, but if that does not materialise, it may proceed with its own funding.

Experts believe the initiative is timely and could be effective, though similar steps should have been taken earlier. They emphasise that awareness among remittance-receiving families is critical, as receiving money alone is not enough – proper utilisation is key to maximising benefits.

Munshi Md Ashfaqul Alam, a remittance expert and senior vice president at Bangladesh Finance, told TBS that remittances currently come through several legal channels, including bank accounts, over-the-counter services, and mobile financial services. However, illegal channels such as hundi or hawala remain a major concern.

He stressed the need for awareness so that expatriates and their families understand that funds sent through illegal channels may be used for criminal activities.

He also suggested creating a central database of expatriates, including their contact details, so that the government can directly communicate important information when needed.

Additionally, he noted that many Bangladeshi embassies abroad are understaffed. In some countries, only a few staff members handle workloads that ideally require 60–70 personnel. Strengthening manpower and service quality at embassies would help improve the remittance system.

On reducing transfer costs, he said sending 1,000 riyals can cost up to 10–12 riyals in some countries, which is significant for low-income workers. He suggested developing digital platforms where expatriates can compare remittance rates and fees across banks, fostering competition and improving service quality.

Stakeholders said the project is a positive step, but for effective implementation, expert input and practical experience must be incorporated. Involving long-time stakeholders in the remittance sector could enhance its success.

Remittances remain a crucial source of foreign currency for Bangladesh's economy. Recently, inflows have shown a positive trend, helping stabilise foreign exchange reserves and meet import expenses.