Cash incentive eased on high-value remittance

The central bank on Tuesday enhanced the paper-free incentive receivable limit against inward remittance in the wake of a sharp fall in remittance earnings in April amid the coronavirus pandemic.

The Bangladesh Bank said in a circular that beneficiaries of inward remittance up to $5,000 (or Tk5 lakh) would be entitled to avail the cash incentive without showing any documents of the wage earners.

In case of receiving remittance beyond $5,000, the beneficiaries will have to provide documents of the wage earners within two months. Earlier, remittance beneficiaries were given 15 days to show proof of the wage earners.

On the other hand, the banks had been allowing remittance beneficiaries cash incentive at the rate of 2 percent against the inward remittance within $1,500 (or Tk1.5 lakh) without providing any proof of earnings.

The government in the current fiscal year has introduced the cash incentive facility to encourage remittance through legal channels. The central bank set July 1 last year as the effective date of the relaxed policy which would remain valid till December 31 this year.

After having a promising growth in the first eight months of the 2019-20 fiscal year, the remittance inflow started to slide due to the coronavirus outbreak from January this year.

As the outbreak turned into a pandemic, the major destinations of Bangladeshi workers went into prolonged shutdown, leaving thousands of them jobless.

As a result, the inflow of remittance dropped to $1.08 billion in April, the lowest since September of 2017 when the country received $856.87 million in remittance.

Remittance earnings in April this year was 24.63 percent or $353.3 million lower than the $1.43-billion inflow in the same month last year.