The government of Bangladesh recently proposed a 2% incentive for the expatriate community from financial year 2019-20, in an effort to encourage more foreign remittance into the country.
Prime Minister Sheikh Hasina, while presenting the country’s budget stated that the cash incentive will only apply to money that is sent into the country through legal remittance channels.
Although Bangladesh saw a 6.92% dip in remittance inflow in August, officials are positive that this is not a cause of worry as remittances normally drop after Eid.
The country has seen its remittance inflow triple from USD 4.9 billion in 2005-2006 to USD 15 billion in 2018. The exchange rate of the Bangladeshi Taka (BDT) against the US dollar is also an added advantage for remitters and should encourage them to send money through legal channels.
Regulations to receive the cash incentive
As per a notice issued by the Central Bank, beneficiaries will receive a direct 2% incentive for transfers of up to USD 1500 without any verification. However, for amounts exceeding USD 1500, they will have to show valid supporting documents; to prevent the misuse of money.
For higher values, beneficiaries will need to show the remitter’s passport, an appointment letter from the employer, and a certification from the Bureau of Manpower, Employment, and Training (BMET). In the case of businesspersons remitting amounts exceeding USD 1500, their beneficiaries need to produce a copy of the business license.
If beneficiaries fail to submit the required documents instantly they have are given a period of five days to submit the documents, after which the beneficiary will be entitled to receive the cash incentive. If remitters or beneficiaries are found violating these rules, they will not qualify to receive any incentives in future.
The cash incentive scheme has been a pleasant surprise for expatriates and their families. It is believed that this move will affect the expatriate community positively, while also helping the government in channelising cross border remittance through formal channels.