Bangladeshi expat workers to get cash incentives on job benefits remittance

The Bangladesh Bank on Thursday announced that the 2.5% cash incentive on money sent by Bangladeshi foreign officers would now include remittance received from their job benefits in the wake of a sharp fall in remittance earnings in the last couple of months. 

From now, banks will provide 2.5% cash incentives receivable against inward remittance to transfers made under the categories such as pension fund, provident fund, leave salary, bonus and other gratuities paid by the employer, and retirement benefits, the central bank said in a circular.

The move is aimed at encouraging more inward flow of remittance, the circular said.

Founder chairperson of Refugee and Migratory Movements Research Unit Tasneem Siddique said, "This is a good initiative for now. But if it is kept in the long run, most of the benefit would be derived by high earners. But if low-earners are encouraged to remit, then the economy will be more benefited."

Earlier, the cash incentive on remittance was increased to 2.5% from 2% as money transfers from migrants overseas saw a 21% year-on-year fall in the July-November period of the current fiscal year.

The government for the first time announced a 2% incentive on remittance exchange in the 2019-20 fiscal year. The finance minister attributed the incentive to larger-than-expected money transfers from migrants overseas in the last fiscal year amid the pandemic.

Despite the infection curve falling worldwide since July 2021, Bangladesh has been registering negative growth in remittance inflow. 

In the first five months of the current fiscal year, Bangladeshi expatriates remitted $8.61 billion, which is around 21% less than the corresponding period of the previous year.  

In November last year, the finance ministry wrote to the central bank seeking a way out of the poor remittance outlook. Subsequently, the Bangladesh Bank recommended the government reduce the cost of sending money home.