1. Remittance Markets – Bangladesh experiences
Nazneen Sultana
Deputy Governor
Bangladesh Bank (the central bank of Bangladesh)
Honorable chair, fellow panelists, distinguished guests, ladies and gentlemen, a very
good afternoon and warm greetings to you all. My heartfelt thanks to the organizers of
Global Forum on Remittances and Development 2015. I feel proud of being a
participant on behalf of Bangladesh and its Central Bank, Bangladesh Bank.
1. The remittance from migrant workers creates one of the most important sources
of foreign exchange and is playing a vital role in economic activities of
Bangladesh. Bangladesh is one of the core suppliers of migrant workers who are
spread almost all over the world and one of the top 10 remittance receiving
countries (8th in 2014) in the world (World Bank, 2014). The inflow of
remittance has increased gradually in recent years from $3.37billion in FY 2003-
04 to $14.23 billion in 2013-14, which is over 11 percent of Gross Domestic
Products. Remittances contribute to economic growth through their positive
impact on consumption, savings and investment.
2. Cross border payments are normally executed by banks worldwide. To facilitate
remittances through alternative channels – exchange houses/MTOs (Money
Transfer Operators), Bangladesh Bank formulated policy guidelines in 2007 for
banks to establish drawing arrangements with overseas exchange houses.
Bangladesh Bank encouraged local banks to establish own exchange houses
abroad as well. Presently, our banks actively are working with around 980
overseas exchange houses. Moreover, our banks have also opened their own
exchange houses at different strategic locations of the world. The number of own
exchange houses at present is 32 operating worldwide.
3. Massive financial inclusion works began in Bangladesh in 2010. As a part of this
program, different visible achievements are Bangladesh Electronic Fund Transfer
Networks (BEFTN), online banking, Mobile Financial Services (MFS), agent
banking, 10-Taka bank account for farmers, school banking etc. which help easy
delivery of remittances.

2. For example, Mobile Financial Services (MFS) are very recent innovation of
Bangladesh Bank, which brought a new revolution in electronic transactions of
inland remittances. The number of accounts under mobile banking has doubled in
one year to reach the figure of 25.86 million out of about 100 million adult
people. 19 banks have been servicing this program through their 543 thousand
agents and 9 more banks to come with MFS. The working people of urban areas
can now remit their income to their family members living in rural areas through
the system of mobile banking which records transactions of about $47 million per
day, which is growing fast. The inland remittance services also facilitate delivery
of wage remittances channeled by banks.
4. Along with MFS Bangladesh Bank has permitted Post Offices and Microcredit
Financial Institutes (MFI) to run inward remittances. Banks are now using MFS,
branch networks of the MFIs and Post Offices as the sub agent for remittance
distribution. Remittances are also distributed through Agent Banking service like
Singer Bangladesh Limited outlets. All these payment facilities have virtually
eliminated the informal remittance inflows. Furthermore, I specially want to
mention here that Bangladesh Bank has established a separate department titled
‘Financial Integrity and Customer Interest Protection Department’ to handle any
complaints and suggestions by the customers or any stakeholders at home and
abroad to ensure the smooth services. There is a hotline 16236 to address
customers’ complaints if any. NRB's (Non Resident Bangladeshi's) complaints
are given highest priority.
5. Bangladesh Bank is at careful watch over the banking operations including all Fx
transactions through online reporting system. Under the system, Bangladesh
Bank closely monitors inward and outward remittance flows. This also ensures
proper delivery of inward remittances to the ultimate beneficiaries.
6. The role of remittances in the economies of man power sending countries like
Bangladesh is very important. It is viewed as a very stable source of foreign
exchange. The foreign exchange receipts help Bangladesh to bridge the gap of
trade balance, improve its balance of payments position and strengthen foreign
exchange reserves. At the micro level, remittances contribute towards increasing
the income of receiving households with concurrent effects on the standard of

3. living, while depending upon consumption patterns they have been known to
increase the level of savings which is a source of capital. Thus, in Bangladesh
remittances have a great potential to generate positive economic and social
impacts.
7. Let me conclude with the words that Bangladesh has been one of the prominent
remittance receiving countries throughout the last decade. It is reasonable to
think that wage remittances are able to have a meaningful impact on the growth
of Bangladesh economy. In Bangladesh, unemployment situation is one of the
most alarming economic indicators. In this case, migration along with consequent
remittance is related with employment and earning of foreign currency. Hence,
remittance is a vital issue for our over-populated country. We are giving proper
attention to this issue for further increase in foreign reserves, national savings and
investments.

4. Table 1
Financial
Years
Exports
(Mn $) Change
Imports
(Mn $) Change
Trade
Balance
(Mn $) Change
Remittances
(Mn $) Change
2002-03 6,492 8,707 (2,215) 3,062
2003-04 7,521 16% 9,840 13% (2,319) 5% 3,372 10%
2004-05 8,573 14% 11,870 21% (3,297) 42% 3,848 14%
2005-06 10,412 21% 13,301 12% (2,889) -12% 4,802 25%
2006-07 12,053 16% 15,511 17% (3,458) 20% 5,998 25%
2007-08 14,151 17% 19,481 26% (5,330) 54% 7,915 32%
2008-09 15,581 10% 20,291 4% (4,710) -12% 9,689 22%
2009-10 16,233 4% 21,388 5% (5,155) 9% 10,987 13%
2010-11 22,592 39% 32,527 52% (9,935) 93% 11,650 6%
2011-12 23,989 6% 33,309 2% (9,320) -6% 12,843 10%
2012-13 26,567 11% 33,576 1% (7,009) -25% 14,461 13%
2013-14 29,765 12% 36,571 9% (6,806) -3% 14,228 -2%

5. Table 2
Fig. in Million US$
Items 2012-13 2013-14
Balance of Trade (7,009) (6,806)
Exports 26,567 29,765
Imports 33,576 36,571
Balance of Services (3,162) (4,189)
Receipts 2,830 3,065
Payments 5,992 7,254
Balance of Primary Income (2,369) (2,571)
Receipts 120 171
Payments 2,489 2,742
Balance of Secondary Income 14,928 14,912
Official Transfers 97 79
Private Transfers
(of which wage remittance)
14,831
14,461
14,833
14,228
CURRENT ACCOUNT BALANCE 2,388 1,346
Capital Account 629 644
Financial Account 2,770 3,075
Errors &Omissions (659) 418
Overall Balance 5,128 5,483

6. Graph 1
0
5000
10000
15000
20000
25000
Remittance
Reserves