Private banks better remittance manager
Private banks, by handling more than 69 percent remittances to Bangladesh, have emerged as major remittance managers overtaking the state-owned banks in the last few years.
Bangladesh Bank data shows aggressive marketing drives launched by the private banks at home and abroad have curtailed the dominance of the state-run banks to only 27 percent in the past few years.
In fiscal 2005-06, the remittance inflow was $4.8 billion. Of the amount, private banks (PCBs) managed 49 percent, while the state-owned banks (SCBs) 46 percent.
According to central bank data, remittance through PCBs increased by 17 percent to $7.62 billion in fiscal 2009-10 compared to a year ago.
The volume of remittance handled by SCBs increased by 5 percent in fiscal 2009-10 to $3.04 billion. Bangladesh recorded $10.98 billion in inward remittance in 2009-10.
Khondkar Ibrahim Khaled, chairman of Bangladesh Krishi Bank, said if any bank has sufficient foreign reserve, it can handle international trade very easily. The bank can also earn money by selling foreign currency.
"The state-owned banks can't do what the private banks can do to build relations with the international money exchange houses," said Khaled.
He said the state banks still handle remittances in a traditional way, while the private banks use new marketing strategies.
All banks have foreign networks for handling remittances. Many private banks even deputed officials in some major remittance generating countries like in Middle East, said Khaled.
As per the central bank data, of all the private banks, Islami Bank was the highest remittance handler in fiscal 2009-10. The bank brought $2.93 billion in remittances followed by state-owned Sonali Bank's $1.3 billion and Agrani Bank's $938 million. Sonali had been the highest remittance earner until FY2005-06 when the amount stood at $1.22 billion.
Helal Ahmed Chowdhury, managing director of Pubali Bank, said the central bank's anti-money laundering drive helped much to redirect remittance inflow to the formal channel.
The private banks' initiatives to open exchange houses in foreign countries and establishing liaison with different foreign exchange houses also helped them become major remittance earners.
Chowdhury said the private banks' move to arrange home delivery of money by using channels like banks, non-government organisations and mobile phones made them the market leader.
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