29 Feb 2024
Being an expat, what other motivation could be better than to send money to Bangladesh? Considering the need for expats to offer financial support and sustainability to their families, the need for dependable money transfer services has become critical. The Bangladeshi government has taken immense supporting initiatives, including the Remittance Incentive Programme. This blog will examine why these selections aren't merely personal preferences but a government-backed policy.
The Bangladeshi government's Remittance Incentive Programme, launched in July 2019, intends to encourage Bangladeshi people working abroad to use legitimate remittance channels instead of the informal Hawala Hundi system. This programme offers a cash reward as a direct deposit into the worker's bank account for every amount sent through legal procedures. The incentive began at 2%, raised to 2.5 percent on January 1, 2022, and was elevated to 5% in October 2023. This programme is a deliberate initiative by the Government of Dhaka to promote official banking systems for remittances, increasing transparency and contributing to Bangladesh's overall economic growth.
The Remittance Incentive Programme was created in response to a troubling trend between 2012 and 2017, during which Bangladeshi remittances as a proportion of GDP fell considerably from 10.5 percent to 5.4 percent. The reduction was ascribed to an increasing preference for the Hundi system, which is an informal network based on trust between individuals in both source and destination nations. Migrant workers preferred the Hundi system for reasons such as better exchange rates, reduced fees, faster transactions, and greater convenience, particularly when compared to traditional banking channels.
To offset this trend and ensure a consistent flow of foreign cash, the Bangladeshi government and central bank implemented an incentive plan, initially at 2%, to encourage using legitimate channels for remittance. The subsequent increases in the incentive percentage further underscore the government's commitment to transitioning expatriate workers towards formal banking systems for their financial transactions.
How does it help the expat’s family, though? Let’s analyse this more closely.
The Remittance Incentive Programme helps families back home by providing additional incentives for people who receive remittances. With strong government support, this effort guarantees that your hard-earned money goes a long way towards improving your family's financial security.
The reward programme addresses one of the primary reasons why employees prefer the Hundi system over traditional channels. Individuals who use banks and licenced channels can benefit from cheaper commissions and better exchange rates. Banks ensure that more of their hard-earned money reaches their relatives in Bangladesh.
The project addresses the widespread impression that bank transfers or money transfer to Bangladesh through a remittance service take longer than Hundi transactions. The incentive programme encourages using conventional banking institutions, resulting in speedier and more effective remittance procedures for expats and their families.
Recognising the issues migrant workers encounter, particularly in Singapore, the reward programme tries to improve convenience. Banks are frequently situated downtown, and hostels are far away in Singapore. Workers who use official remittance channels may access banking services more readily, even on their days off, without having to drive long distances.
The reward programme provides a solution for workers who choose the Hundi system since there are no bank branches in their hometowns or villages. By encouraging official channels, the effort ensures that families can only travel short distances to collect remitted funds. In rare situations, the payment may also be handed directly to the family home, reducing the burden on recipients.
While it remains unclear how the government and banks would pay the substantial top-up, the incentive programme demonstrates a commitment to channelise legitimate remittance. Despite potential variances in the extra top-up between banks, the program's presence indicates a larger drive for compliance with legal and licenced channels. It emphasises the need for transparency in financial transactions.
The program's stepwise approach to incentives, which begins at 2% and gradually increases to 5%, provides a strong incentive for expatriates to use legal methods for sending money to Bangladesh. This promotes good financial behaviour and assures a progressive transition away from informal practices.
Encourage your family to engage actively in the Remittance Incentive Programme. This benefits them directly while also contributing to Bangladesh's general economic prosperity.
The Bangladeshi government created a 5% top-up incentive for remittances, notably for cash sent to their families in Bangladesh by Bangladeshi expats working abroad. However, the use of this incentive takes an unexpected turn when certain individuals participate in the recruiting process.
In the context of job-seeking Bangladeshi workers in Singapore, many resort to fellow Bangladeshis, sometimes known as "dalals”. They act as freelancers connecting job seekers and potential employers. Despite a lack of legal licencing, these dalals play an important part in recruiting. The following are two main categories of Dalals.
The first category of dalal consists of trusted employees who already work in Singapore and use their positions to promote new personnel to their superiors in exchange for compensation. This category may make over $2,000 for every recruitment transaction, making it a profitable but potentially unlawful activity.
The second category comprises Singaporeans with work permits or other passes who negotiate deals with official employers to avoid regular employment. These workers mostly engage in job brokering, even though they lack the legal status to do so.
Now that you've learned about the incredible benefits of the Bangladeshi government's Remittance Incentive Programme, make your remittance safer and more secure. 2024 has made money transfer to Bangladesh a transformative experience when backed by the Bangladeshi Government's Remittance Incentive Program. Explore the benefits of online money transfers with ACE Money Transfer, which fully supports this program. Take advantage of favourable exchange rates and contribute to your loved ones' financial well-being. Join the programme now and make each remittance count.
No, the program is widely available across various remittance service providers in Bangladesh, including ACE Money Transfer. Check with ACE Money Transfer or your preferred remittance service for specific details.
Incentives are typically tied to specific criteria. Ensure that your remittance meets the eligibility requirements outlined by ACE Money Transfer to enjoy the full benefits of the Remittance Incentive Program.
Certainly! The program is open to all expatriates. Recommending ACE Money Transfer to others can not only enhance their remittance experience but also contribute to positive financial impacts on their families.
While specific limits may apply, ACE Money Transfer, in alignment with the Remittance Incentive Program, generally encourages remittances of various amounts. This approach ensures accessibility for a broad range of expatriates seeking to benefit from the incentives.
ACE Money Transfer collaborates with trusted remittance service providers, employing state-of-the-art security measures such as secure and encrypted channels to safeguard online money transfer transactions. Your financial security is a top priority at ACE Money Transfer.
