Remittances could exceed $7b in 2008 in Bangladesh
Remittances could exceed US$7.0 billion in 2008, according to Anil Kapur, Western Union (WU) Managing Director for South Asia, as the number of Bangladeshis working abroad increases.
Speaking to The Daily Star on a recent visit to Dhaka, Kapur said another reason for the increase was the move to send money through official channels rather than via 'hundi', unofficial networks for transferring cash.
According to official statistics, the country received nearly $6.0 billion as remittance from non-resident Bangladeshis (NRBs) last year and the contribution of such remittance to the gross domestic product (GDP) crossed 13 percent.
But, Anil declined to say the exact figure that his company transacted as remittance for Bangladesh last year. He only said that WU's share in the global money transfer business is over 17 percent.
Kapur was in Dhaka to sign an agreement with the Postal Department of Bangladesh enabling WU customers to receive money at local post offices.
He said the major competitors of WU in Bangladesh are private and public commercial banks. “I hope we will win in the competition when our postal services come into full operations,” he said.
“As per the deal, we will launch our services through 450 post stations in Bangladesh in the first phase and the number of such postal WU money receiving points will be raised gradually,” he said.
He said Bangladesh is among the top 15 countries in the world in receiving remittance and if the current trend continues the country could soon be among the top 10. China is the number one recipient.
WU has been working in Bangladesh since 1993 with only 100-point locations and at present the number of point location is more than 1400 across the country.
Kapur said at present 30 percent of remittances come from Saudi Arabia, 15 percent from the USA and more than 10 percent from the UK.
About the agreement with the postal department Kapur said Bangladesh will receive 25 percent as royalty from the commission that is received by WU in Bangladesh.
He said train up the people of postal department is not difficult, as both WU and postal department have agreed to carry out the job in partnership basis.
He said WU maintains strong compliances and in the last year the company spent $ 35 million for compliance worldwide.
“So, there is no chance of losing of money from the post offices,” he said.
He said if the WU starts functioning with full capacity the government will also be beneficiary as the people will send their hard earned foreign through a formal channel.
Now, some NRBs send their currency send money through informal channels like hundi, for which the government losses huge revenue.