The Bangladesh Bank has announced that it has relaxed the conditions needed to qualify for their remittance incentive. This is where the country’s government will add 2% of the sent value to transfers, based on the amount when converted into local currency.
For anyone sending money to Bangladesh, this is a huge incentive.
Expat Bangladeshis can now get a 2% incentive without showing any documentation on remittances up to Tk 500,000.
With every qualifying legal transfer from a Bangladeshi national living abroad into a Bangladesh account being rewarded, this is timely and good news for anyone wanting to send money during the Eid al-Adha celebrations and onwards for the rest of the year.
The original money transfer incentive
The plan was originally proposed by Prime Minister Sheikh Hasina in 2019 when presenting the country’s budget.
Effective from 1 July 2019, the 2% incentive had the desired effect of increasing the number of remittances coming into Bangladesh, an important part of the country’s economy.
As reported by Xinhuanet.com, in the five months between July and November 2019 the amount of money sent to Bangladesh was 23% higher than it had been over the same period the previous year.
In November 2019 alone, there was the equivalent of $1.56bn in remittances, a 31% rise from the previous year.
As well as boosting money transfer to Bangladesh, the incentive helped the country’s economy and communities in the process. The scheme was also seen as a way of ensuring money would only be sent through formal channels (transfer services or overseas banks which have agreements with local banks) rather than any illegal method.
Despite the initial success of the policy, the arrival of the Covid-19 pandemic has meant that international money transfer to Bangladesh has slowed down since March.
The Dhaka Tribune, reported that April saw a 16.01% drop in remittances from the previous month.
It is this reduction that prompted the Bangladesh Bank to relax the conditions and increase the upper limit that can be sent without the need to show any documentation.
The Financial Express BD quote the Bangladesh Bank Executive Director Kazi Saidur Rahman, as saying: “We are giving the expatriates the facilities to encourage them to send more money.”
What the change means for those sending money to Bangladesh
The big change is that the expatriate Bangladeshis are no longer required to show any documentation on transfers up to Tk 500,000 ($5,000) in order to receive the 2% bonus, a large increase on the previous limit of Tk150,000 ($1,500).
For example: When applied to the previous upper limit of Tk 150,000 the beneficiary would receive Tk 153,000 (a Tk 3,000 reward).
Now, anyone being sent the maximum of Tk 500,000 will receive Tk 510,000 (a Tk10,000 reward).
The opportunity to receive free money is something that we’d all appreciate. Right now, with many people struggling due to the economic impact of Covid-19, this could be a much-needed boost.
Also, those who have already sent money can also make the most of the incentive and have until 31 December to do so.
There is also a relaxation on how long those sending more than TK 500,000 will have to submit their papers – now two months rather than the previous 15 days.
Within this time the remitter must provide the following documentation for their beneficiary to receive their 2% incentive:
- ANY ONE of the following
- Appointment letter
- BMET approval
- Resident permit
-Trade licence (if owner of a business)
Other terms and conditions remain the same as when the policy was first announced last year, including the fact that anyone breaking the rules will not be entitled to future incentives.
How Small World can help
We know that many of our customers transfer money to Bangladesh from the UK during Eid al-Adha every year and the relaxation of conditions needed to receive the 2% incentive is something that you will want to take advantage of.
The most popular ways to send money to Bangladesh
- Cash Pick-Up
- Bank Deposit
- Mobile Top-up
Our main partners in Bangladesh are Janata Bank, Agrani Bank, Uttara Bank, National Bank, Dutch-Bangla Bank, Islami Bank Bangladesh, Rupali Bank, Social Islami Bank, Bank Asia, Southeast Bank, Union Bank, SBAC Bank, Al-Arafah Islami Bank, Bank Asia