Remittance to figure in BB meet today

Posted: ফেব্রুয়ারি 10, 2009 in Remittances

The central bank has given special weight to a smooth inflow of remittance and its productive uses, senior officials of Bangladesh Bank (BB) said on the eve of a high-profile meeting with bankers.

“Remittance issues will dominate tomorrow’s meeting between the central bank high-ups and managing directors of different commercial banks,” a senior BB official told The Daily Star yesterday.

 “BB is thinking of introducing a reward system for those who send high remittances,” the official said. “The use of remittance in productive sectors will also be highlighted at the meeting.”

BB Governor Dr Salehuddin Ahmed will chair today’s meeting to be attended by managing directors of all commercial banks.

Over the past decade, remittance flowing into Bangladesh has witnessed a phenomenal rise. Remittances have outpaced official development assistance (ODA) and foreign direct investment (FDI) inflows. The UNDP commented that it “has been causing a silent revolution in Bangladesh”.

Inward remittance is also helping Bangladesh maintain the balance of payments.

But remittance in South Asia is mainly directed towards the needs of families. According to a study recently conducted by Citi NA South Asia, 66 percent of remittance in Bangladesh is used for family maintenance, 12 percent to purchase land, 14 percent to repay loans, less than 5 percent is used to invest in business and only 3 percent is saved for future.

India, Bangladesh and Sri Lanka together account for 14 percent of remittance received by all developing economies, pegged at $265 billion in 2007, a 16 percent year-on-year growth, the study found.

According to BB data, inward remittance stood at $865 million in January, a record inflow in a single month, despite the global economic recession that forced millions of migrant workers out of jobs around the world.

In the July-January period, the first seven months of fiscal 2008-09, remittance stood at $5,369.98 million, a 30 percent rise from the same period of the previous fiscal year. Remittance inflows were $7,915 million in fiscal 2007-08.

BB officials said the meeting would discuss how the country could best use remittance.

“Remittance prone areas will be identified and accordingly, suggestions will be made for its better use,” a BB official said.

The meeting will also discuss the liquidity position of commercial banks and the trends in credit and deposit growth.

“The problems with software export will also be discussed at the meeting,” the official said. Software export is showing a declining trend.

There are some other miscellaneous issues to be discussed in today’s meeting, officials added.

The daily star 10.02.2009




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