Reaching Out Into Remore Areas: Bangladesh Recent Remittance Manoeuvre

Dhaka, Bangladesh | February 29, 2008 by D-8 Secretariat

A local private commercial bank has tied up with a leading micro-credit lender to reach out remittances to its beneficiaries in rural remote areas fast, as reported by Bangladeshi media. The National Credit and Commerce Bank Limited has taken the initiative yesterday by joining hands with Thengamara Mohila Sabuj Sangha (TMSS), a micro-credit NGO (non-governmental organisation), in this regard.

“I hope NCC Bank’s partnership with TMSS will help the bank to a great extent to fulfil its remittance delivery obligations using the branches of the NGO that are located at remote areas,” Bangladesh Bank (BB) Governor Dr Salehuddin Ahmed told the deal signing ceremony in Dhaka to launch the remittance project.

Chaired by Tofazzal Hossain, the NCC Bank chairman, the function was also attended by Chris Austin, country representative of the Department for International Development, UK, as special guest.

The BB governor said commercial banks very often do not go by the central bank instructions that asked them to reach out remittances in a time limit of 48 hours to urban beneficiaries and within 72 hours to the rural ones.

“The new initiative will help the banks and financial institutions to comply with the Bangladesh Bank instructions,” he added.

On note forgery, the central bank chief asked for speedy trial of the persons involved in printing fake currency notes. According to the BB sources, there are some 3600 note forgery cases remain pending. The NCC Bank initiative, the first of its kind in Bangladesh, would be launched in early April this year.

The NCC Bank-TMSS project worth Tk 8crore would enable installation of electronic point of sale (POS) technology in all the 53 NCC Bank branches and 250 remote branches of TMSS. According to the project initiator, the remittance beneficiaries will be provided with free debit and prepaid cards, which would allow them to use card transaction up to the amount of their remittance.

The beneficiaries will be allowed to conveniently draw out their remittances in cash on the spot or as and when necessary at the branches of both the organizations to use automated teller machines (ATMs) and buy goods and services from the merchants having POS machines. However the central bank chief advocated ensuring more facilities for the wage earners, compared to the ones being provided to the wage earners in other countries.

Remittances sector has indeed been growing into a gigantic industry. It has more than doubled since 2000, and with globalization increasing the numbers of people on the move, there’s no end in sight. In a recent report, the World Bank said that globally, remittances totaled nearly $276 billion in 2006. This mean that if all the guest workers incorporated as a company, their migrant multinational would rank No. 3 on the Fortune 500 list, trailing only Wal-Mart and Exxon Mobil in annual revenue.

“With all this potential in mind, we want to put more focus on this D-8 migrant worker issue considering that the remittance sent home plays a quite significant role in cutting down poverty lines in our member states,” says D-8 Secretary General, Dr. Dipo Alam. He added that the remittance are allocated for food, education, health, housing, as well as for developing micro industry or small & middle enterprises.

D-8 Secretariat is taking a concentrated initiative to set up a D-8 working group on this issue to help member countries to better route this potential remittance for the development of the D-8 member countries. Secretariat had contacted some participants who attended International Meeting on Migrant Workers in Brussels, Belgium, to work with D-8 Organization on ideas to set up a Working Group on Migrant Workers and Remittances. This would also include cooperation of international organization such as ADB, World Bank and IMF.

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