According to the World Bank, Bangladesh received a total of $22.2 billion as remittances in 2021, representing around 5.3% of the country’s Gross Domestic Product (GDP). Remittance inflow to Bangladesh refers to the amount of money sent to the country by the Bangladeshi diaspora. Apart from a lot of Bangladeshi migrant workers in middle eastern countries, there are a lot of people living in developed countries in Europe, the USA, and Canada, who have their family members and relatives in Bangladesh. According to BBC, about 2 million Bangladeshi people live in 162 countries through government and private channels. Their remittances are a significant source of income for Bangladesh and have played a substantial role in the country’s economic development.
Money Inflow In Bangladesh
According to a World Bank report, Bangladesh is the third-highest remittance recipient country in South Asia and the 7th highest remittance recipient country worldwide. Dated Back to 1974, the government initiated the Wage Earners’ Scheme to help non-resident Bangladeshis send their money to Bangladesh through legal channels. Soon, it became popular with Bangladeshi migrant communities abroad, and in FY 1974-75, around $11.8 million was sent to Bangladesh as remittance.
According to the Bureau of Manpower Employment and Training, in 1976, Bangladesh started sending its labor force overseas as there was a massive demand for both skilled and unskilled labor due to the discovery of oil mines in the Middle East during the 1970s. Since then, KSA (Kingdom of Saudi Arabia) has been Bangladesh’s most significant foreign remittance source. Along with KSA, UAE, Qatar, Oman, Bahrain, Kuwait, Libya, Singapore, Malaysia, USA, and the UK are also significant sources of foreign income for Bangladesh.
Although remittance inflows to Bangladesh have declined over the past four decades, this inflow has gradually risen since the middle of the last decade. In 2018-19, Bangladesh’s remittance income from legal channels was $16.41 billion, which increased by 10.87 percent to $18.20 billion in FY 2019-20. In FY 2020-21, remittances grew by 36.10 percent to $24.77 billion. However, due to the global corona pandemic and inflation, the amount of remittances coming to the country had decreased to $21.03 billion in FY 2021-22.
Remittances have declined due to the lockdown, which has kept people from going to work and reduced their income. Additionally, due to the closure of institutional offices, remittance providers have sent money into the country through illegal means such as hundi. It was surprising to discover that at least $20 billion of remittances come to Bangladesh every year through hundi. According to a CID source, at least five thousand agents of mobile financial service (MFS) institutions like bKash Bangladesh are involved in the transaction of illegal remittances from abroad. The Bangladesh government has been providing a 2 percent instant incentive for several years to stop money transactions through hundi and increase remittance inflow through banking channels, which has already been increased to 2.5 percent, just to encourage people to use legal channels to send their money.
Also, another reason behind the decrease in remittance inflow is that the rural women of Bangladesh still need to become familiar with the financial system. Therefore, they avoid banking and other financial institutions because they require more understanding. Hence, their family members working abroad send money through hundi with the help of a nearby person. However, more women are becoming involved with financial services nowadays, and the gender gap has decreased from 7 percent to 4 percent, according to Global Findex Database 2021. Also, due to the government’s incentive program, more immigrants are becoming interested in sending their money via MFS like bKash, Rocket, etc.
Best Ways To Transfer Money To Bangladesh
Bangladeshis living abroad can easily and conveniently send money to their family members living in the country through authorized and listed foreign banks, money transfer organizations (MTOs), money exchange houses, and mobile financial services. Here are a few ways expatriates can send money to their families in Bangladesh.
List of best ways to send money to Bangladesh
- Bank Transfer
- Money Gram
- Western Union
- TapTap Send
To send money to a Bangladeshi bKash account holder, an expatriate needs to visit authorized bank branches/money exchanges/MTO agents and provide the recipient’s bKash account number and full name. Later, they need to pay the required amount and ask the bank/money exchange/MTO agent to initiate the money transfer process. Within minutes, the expatriate’s family member with that particular bKash number will receive the funds in his/her account.
Apart from bKash, Dutch Bangla Bank’s MFS – Rocket, can also be used to bring remittance to Bangladesh. For this method, the remitter needs to visit a designated exchange house of DBBL located near his/her area and provide the beneficiary’s Name, Bank Name (Dutch-Bangla Bank), and Rocket account number. Then, it takes 24-72 hours to transfer the money to the beneficiary’s Rocket number.
2. Bank Transfer
Apart from MFS transfer, there are several other ways to send money to Bangladesh, and one of those is direct bank transfer., which is also called wire transfer. For a wire transfer, the expatriate must go to the nearest bank and provide the recipient’s bank account information, including the bank’s name, branch name, account number, and routing number. Sometimes, the sender may also be required to provide additional documentation, such as a government-issued ID.
Wire transfers typically involve fees, including charges from the sender’s bank and any intermediary banks involved in the transfer. You will need to pay these fees to complete the transfer. After providing all the necessary information and fees, the bank will process the transfer. The amount of time it takes for the transfer to be completed will depend on several factors, including the banks involved and the destination country.
3. Money Gram
MoneyGram is one of the most well-known money transfer systems in the world because it allows money to be sent very quickly. For example, to send money to Bangladesh, those living abroad should go to the nearest bank or financial institution bearing the MoneyGram logo. Their customer service officers will supervise the entire money transfer process. The recipient must provide a photocopy of their National ID card and tracking number for withdrawal. Moneygram has around 2 lakh agents in 180 countries globally.
4. Western Union
One of the safest and most reliable ways to send money to Bangladesh is through Western Union. When an expatriate wants to send money home, they must go to a Western Union agent and fill out a form. The recipient’s name, address, and amount must be written on the form and given to the Western Union agent to start the payment transfer process. Then, the sender will receive a reference number from the agent. This number is known as an MTCN. Most of the time, this number has ten digits, which is a way to track a money transfer.
Anyone can use that number to find out how the transfer is going. So if this MTCN number is given to the recipient, that person can go to any agent or bank and get the money immediately. Aside from this, if the person sending the money gives the agent the information for the bank account, the money will go straight into the recipient’s bank account.
The money transfer service – Xoom, is owned by PayPal. Bangladeshis living overseas can use this platform to send money from the United States to other countries. The sender needs a Xoom account to send the money, which they can get by going to the Xoom website and signing up. There are two ways to use Xoom: cash pickup and bank deposit. If you want to take cash pickup, you can get cash from the cash point that is closest to you. On Xoom’s website, you can find a list of cash points. For the bank deposit option, the sender must log in to Xoom, enter the recipient’s bank information, and then pay the money. The money will be transferred to the recipient’s account within two to three days.
Like Xoom and Wise, Remitly is also an online-based money transfer system available in 135 countries, and it works in the same way as those two platforms. Remitly has partnerships with local Bangladeshi Banks like Sonali Bank, Islami Bank, Prime Bank Limited, Janata Bank, Dutch Bangla Bank, Standard Chartered, Mutual Trust Bank, and Agrani Bank Limited. So, migrant Bangladeshis can use Remitly to send remittances easily, and the receivers can withdraw cash from these banks.
7. TapTap Send
Taptap Send is a money transfer app that lets people from the US, UK, EU, and Canada, send money to places in Africa, Asia, and the Caribbean, like Bangladesh, Pakistan, Ghana, Madagascar, Vietnam, Nepal, etc. Taptap Send has teamed up with Bangladeshi MFS services like bKash and Bangladeshi banks. Because the money transfer happens right away, Bangladeshis living abroad can get around the issue of sending money back home. All it takes is a few taps, as the name suggests. After signing up on the app, the sender needs to provide personal bank details, a photo, and an address for the verification process, which will enable the system to understand that the sender is living in the US, UK, EU, or Canada. Then, the main menu opens up where the sender can select the amount to send and provide the receiver’s bKash no. The receiver will get the money on their bKash app within a few seconds. Tap Tap Send offers a great remittance rate and no hidden charge or conversion fee.