Digital hundi shrinks remittance flow through banks: BIBM
Hundi traders have been fast transferring remittance to relatives of expatriate Bangladeshis through mobile services, which have resulted in a fall in the amount of money sent through banking channels.
This was reflected in a research report by the Bangladesh Institute of Bank Management (BIBM).
The report titled “Increasing flow of remittance through banking channel: Bangladesh context” was placed at a seminar at the BIBM auditorium yesterday.
A six-member team led by BIBM Director Shah Md Ahsan Habib prepared the report. According to the report, remittance flow decreased in recent times all over the world but the fall in Bangladesh was more as it accounted for a considerably high amount of remittance generated in total.
The report identified several reasons for which remittance was plunging, including bank branches being distant from the houses of remitters' relatives.
The report also mentioned a lack of good behaviour on the part of bankers, requirement of various documents and weekly holidays as causes.
BIBM Supernumerary Professor Yasin Ali said the scope of mobile banking has much increased in the last five year but banks have failed to utilise the channel.
He said banks have to provide remitters the opportunities which were offered by unofficial channels, otherwise inflow of remittance through the banking channel would plummet.
Another BIBM Supernumerary Professor Helal Ahmed Chowdhury said the cost of sending remittance through banking channels was higher, the effect of which was falling on remittance inflow.
Chowdhury said an initiative has to be taken to slash the cost of transferring remittance to increase the inflow through banking channels.
SK Sur Chowdhury, deputy governor of Bangladesh Bank, said remittance flow to Bangladesh declined by 11.10 percent in 2016 due to lower oil prices and fiscal policy tightening in the Gulf Cooperation Council countries.
It is hoped that awareness programmes would encourage non-resident Bangladeshis to come forward to know the importance of channeling their money through banks, he said. Chowdhury also said to ease the flow in the formal channel, Bangladesh Bank has reduced the security deposit requirement for exchange houses abroad to establish drawing arrangements with local banks.
In addition to their own bank branches and ATM booths, banks are now using the branch networks of microfinance institutions and post offices as sub agents for remittance distribution.
Remittances are also distributed through agent banking, such as that provided through Singer Bangladesh Limited outlets, he said.
Furthermore, Bangladesh Bank has established a separate “Financial Integrity and Customer Interest Protection Department” to handle complaints and suggestions of customers or stakeholders at home and abroad to ensure smooth and hassle free services.
The “16236” hotline is to address customers' hassles, if any. He said at the moment no bank can take more than two days in reaching remittance to designated beneficiaries.