Dhaka seeks to initiate banking operations in KSA for migrants
Expatriate Bangladeshis will benefit from increased banking facilities in Saudi Arabia, making it easier to send remittances through formal channels
Highlights:
- More than 28 lakh Bangladeshis are working and residing in the Gulf country
- In fiscal 2022-23, about $377 crore in remittances arrived from KSA.
- 26.5% of Bangladesh's total remittance income in fiscal 2012-13 came from Saudi Arabia alone
Dhaka is expected to request Riyadh to allow the operation of bank branches or, at the very least, the digital banking services of Bangladesh's commercial banks in Saudi Arabia to facilitate expatriates sending remittances home through formal channels.
A proposal to this end may be discussed in a meeting between Finance Minister AH Mahmood Ali and Saudi Arabia's Finance Minister Mohammed bin Abdullah Al-Jadaan, according to sources in the finance ministry in Dhaka.
The bilateral meeting between the two leaders is scheduled to take place on the sidelines of the Islamic Development Bank (IsDB) annual meeting to be held from 27-30 April in Saudi Arabia.
Keep updated, follow The Business Standard's Google news channel
Expatriate Bangladeshis will benefit from increased banking facilities in Saudi Arabia, making it easier to send remittances through formal channels. Despite being the largest labour market for Bangladeshis, remittances from the oil-rich country have been decreasing recently, according to the sources.
According to the last census of the Kingdom of Saudi Arabia, more than 28 lakh Bangladeshis are working and residing in the Gulf state, constituting the largest population of expatriates in this country.
In the fiscal 2022-23, about $377 crore in remittances arrived from that country. According to economic survey data, 26.5% of the country's total remittance income in the fiscal 2012-13 came from Saudi Arabia alone. However, Saudi Arabia's share fell to 17.5% in the last fiscal year.
According to the talking papers, Bangladesh will request a reduction in the charges imposed by Saudi banks and other financial organisations for sending remittances to Bangladesh through legal channels, as a significant amount of remittances received from KSA are sent by Bangladeshi expatriates.
It further said the meeting will also discuss launching a programme for Bangladeshi insurance companies to provide insurance benefits to Bangladeshi companies under the insurance scheme for expatriates.
Officials at the finance ministry said Bangladesh will propose to the Saudi Arabian Monetary Authority to allow a Bangladeshi insurance company to insure the lives of expatriates, or alternatively, to establish a joint venture between a KSA agency, such as the Saudi Arabian Cooperative Insurance Company, and Jiban Bima Corporation.
According to sources in the finance ministry, the finance minister may propose support from Saudi Arabia to build an energy hub in Bangladesh. This hub would serve as a gateway for financing and technology transfer to ensure energy security in the region.
Bangladesh will also request ensuring a smooth supply chain, particularly for food and fuel, so that businesses can operate according to internal plans without being disrupted by external shocks.
Furthermore, the finance minister will request Saudi Arabia to enhance and expand support in diversified sectors such as readymade garments, pharmaceuticals, tourism, renewable energy, leather, and jute, which are promising sectors for the sustainable economic growth of Bangladesh.
