Remittance Payment

Dutch-Bangla Bank LimitedYOUR TRUSTED PARTNER

Overview on Wage earners remittance payment through different exchange houses

Compiled by:Mohammed Masud Parvez

Senior Assistant Vice President

Remittance

Remittance represents transfer of fund from one place to another through official channel.

Foreign Remittance

Foreign remittance means remittance of foreign currencies from one place/person to another place/person.

In broad sense, foreign remittances include all sale and purchase of foreign currencies on account of Import, Export, Travel and other purposes.

However, specifically Foreign Remittance means sale and purchase of foreign currencies for the purposes other than export and import.

Foreign Remittance

All foreign remittances are grouped into two broad categories and guided by the Foreign Exchange Regulation Act, 1947 and guidelines for Foreign Exchange Transactions of Bangladesh Bank: a) Foreign Inward Remittanceb) Foreign Outward Remittance

Macroeconomic Impact of Inward Foreign Remittance

Poor country like us foreign remittance are the largest source of external financing.

Remittances help reduce poverty in the recipient economy.

Remittances may be more effective in a good policy environment. Remittances may promote financial development, which in turn can enhance growth.

Trend of Inward Remittance

Bangladesh is a major labour-exporting country.

Since its independence in 1971, more than 5.5 million Bangladeshis have gone abroad in 68 countries.


Wage Earners Remittances (Million US Dollar)

Year Remittances

2003 3062.02004 3372.02005 3848.32006 4801.92007 5978.52008 7900.02009 9689.32010 11004.682011 12168.092012 14140.84

2013 13780.82


The trend in the country’s receipts of migrant remittances has risen sharply in recent years.

Of the 5.5 million migrants, 4.3 million are semi-skilled or unskilled, with average monthly earnings under US$400 approx.

It is estimated that a typical migrant remits 55.65 percent of his income and that remittances constitute 51.12 percent of the total income of recipient families.

Prevention of unofficial Remittance Channel

The underlying reason was that Bangladesh bank made vigorous efforts for preventing flow of remittances through unofficial channels.These include-

- expansion of activities of drawing arrangements - review of statements received from foreign banks/exchange houses - close monitoring and supervision of banks etc.

Focus on Exchange Houses

Bangladesh Bank has simplified the approval policy of drawing arrangements between foreign exchange houses and domestic banks


As a result, 40 banks have been allowed for establishing 820 drawing arrangements with 280 exchange houses all over the world for collecting remittances.

BB has been made vigorous efforts such as allowing establishment of exchange houses/branch offices abroad by local banks, the banks therefore are encouraged to have better control on the remittance collections.


Under this arrangement, some banks have already established their offices abroad to collect remittances by their own.

It may be mentioned that remittances are being sent by 28 exchange houses/branch offices /representative offices abroad of 8 local banks.

Eligibility of Exchange Houses

The concern shall have to possess the license/approval from the Central Bank or concerned regulatory authority of the respective country to conduct money transfer business.

The concern shall have to possess the license/approval/certificate as applicable from other authorities.

The concern shall have to bear the name that signifies its engagement in money transfer business such as the words like money transfer, exchange, remittance etc. shall have to be included therein.

Without having permission/consent from the concerned bank operating in Bangladesh, the name of the bank or part of it (viz. Sonali, Rupali, Janata, Agrani etc.) shall not be used by the exchange house with its own name.

Eligibility of Exchange Houses

Owner(s)/Director(s) of the exchange house shall have to be the citizen (or Foreigner thereof other than Bangladeshi without citizenship/residence permit) or the permanent resident of that country.

While considering approval for establishment of drawing arrangement, preference shall be awarded to the exchange house having at least 3 years of experience in money transfer business.

Exchange House(s) to Comply

The concern shall have to follow the exchange rate quoted by the bank concerned for the purpose of remittance.

The concern shall have to confirm the deposit of money of remittance collected from the remitter/of cover fund to NOSTRO account of the concerned bank within 24 hours of collection thereof.

The concern shall have to regularly provide statement containing number and amount of remittances sent to the concerned bank.

The concern shall not use monogram of Bangladesh Bank or words viz. "approved by Bangladesh Bank" in its publicity activities.

The existing rules and regulations in respect of sending remittances to Bangladesh or transactions thereof shall have to be strictly complied with.

Exchange House(s) to Comply

Minimum limit for remit t ance

Count ry/ Region Previous limit

1 USA USD 3.00 million USD 3.00 million2 UK UKP 2.00 million UKP 2.00 million3 I t aly ------- EUR 2.00 million4 Canada USD 2.5 million USD 2.5 million5 ------- USD 3.00 million

6 ------- USD 1.5 million

7 Other count ries ------- USD 1.5 million

Sl. no

Present prescribed limit

Middle East (KSA, UAE, Qat ar, Oman, Bahrain, Kuw ait )Middle East (Ot her count ries)

Bank(s) to Comply

Related information as well as license/approval letter issued by the Central Bank or from the competent authority of the respective country, credit report from any reputed credit agency, 3 years' audited financial statements, profile of directors/owners of the concern, memorandum and articles of association etc., in support of/in assessing its eligibility, shall have to be collected at the time of establishment of drawing arrangement.

Letter of reference/certificate (must be favorable) from the Bangladesh Embassy/High Commission of the respective country shall have to be collected.

After having assessed the eligibility of the concern and submitted the required papers, approval of the Bangladesh Bank (from the Foreign Exchange Policy Department) shall have to be applied for.

Bank(s) to Comply

The agreement for establishment of drawing arrangement with the exchange house shall have to be concluded having maintained therein the reflection of the terms and conditions as outlined in the letter of approval.

One or more than one non-resident foreign currency account (NRFCA) and only one nonresident non-convertible taka account (NRTA) in the name of the concerned exchange house shall be allowed to be opened.

Payment shall have to be made to the beneficiary by debiting the concern's NRT account only after confirmation of the deposit of equivalent foreign currency/cover fund into the NOSTRO account of the respective bank in Bangladesh against the remittance sent thereby.

Under no circumstances, overdrawn facility shall be allowed in the account of the exchange house and no lead-time facility shall be awarded either.

Bank(s) to Comply

As the concern shall have to follow the exchange rate quoted by the bank for sending remittance, the bank shall ensure intimation of the exchange rate regularly thereto.

The bank shall not extend the validity of the agreement/drawing arrangement unless the validity of the approval of the central bank or the competent authority of concerned country is extended.

The prescribed time limit (72 hours) for disbursement of remittances received through drawing arrangement shall have to be followed

Any suspicion in transactions with the exchange house (viz. excessive remittances in the name of same beneficiary, remittance in the name of corporate instead of individual name, irregular replenishment of cover fund etc.) shall have to be brought to the notice of the FEPD, Bangladesh Bank.

Bank(s) to Comply

Securit y Deposit (Draft Draw ing)

Type of Security

1 USD 25,000.00 USD 50,000.00

2 NRT Account

Sl. no Amount fixed previously

Amount fixed at present

Bank Guarantee/Cash Deposit. (NRD account or term Deposit)

Tk.0.20 million to Tk.0.50 million

Tk.1.00 million

Bank(s) to Comply

Securit y Deposit (EFT)

Type of Security

1 USD 10,000.00 USD 25,000.00

2 NRT Account



Bank Guarantee/Cash Deposit. (NRD account or term Deposit)

Tk.0.20 million Tk.0.50 milliom

Bank(s) to Comply

Securit y Deposit (PI N Code)

Type of Security

1 Not Prescribed USD 50,000.00

2 NRT Account Not Prescribed



Bank Guarantee/Cash Deposit. (NRD account or term Deposit) Equivalent Tk. of

USD 25,0000.00

DBBL Remittance at a Glance

Sl# Item 2011 2012 2013

1 Number of Arrangement 16 26 30

2 Remittance inflow in Bangladesh (Million USD) 12,168.05 14,151.65 13,780.84

3 Remittance inflow in DBBL (Million USD) 144.89 204.17 251.29

4 Number of Transactions in DBBL 257,269 406,789 5,19,244

5 Commission from Exchange Houses (Million BDT)

19.71 21.53 20.69

6 FX Gain from Exchange Houses (Million BDT) 74.4 90.59 55.60

7 Country Position of DBBL 17 16 12

8 Holding of Country Remittance (%) 1.19 1.44 1.82

Exchange Houses having arrangement with DBBL

Sl. Name of the Exchange House Sending Countries

1 Al-Ahalia Money Exchange Bureau, U.A.E. U.A.E

2 UAE Exchange Centre L.L.C. , U.A.E. GLOBAL

3 Kuwait Asian Int'l Exchange Co. W.L.L., Kuwait Kuwait

4 Dollarco Exchange Co., Kuwait Kuwait

5 East Bengal Exchange Co., Canada Canada

6 Prabhu Money Transfer, U.S.A. GLOBAL

7 Western Union Money Transfer, U.S.A. GLOBAL

8 Wall Street Finance L.L.C., U.S.A. GLOBAL

9 Choice Money Transfer, U.S.A. U.S.A & Europe

10 United Traders Ltd., UK U.K.

11 Habib Exchange Company LLC, U.A.E. U.A.E

12 Al-Zaman Exchange WLL, Qatar Qatar

13 Zenj Exchange Co. , Bahrain GLOBAL

14 Al Ansari Exchange, U.A.E. U.A.E/ K.S.A

15 IQRA Finances (UK) Limited, U.K. U.K

Exchange Houses having arrangement with DBBL

Sl. Name of the Exchange House Sending Countries

16 Al Jadeed Exchange LLC, Oman Oman

17 U. S. Money Express Co., USA U.S.A

18 Lari Exchange Co., Qatar Qatar

19 Asia Express Exchange Co. LLC, Oman Oman

20 Lulu Int’l Exchange LLC, UAE U.A.E

21 Trans-Fast Remittance LLC, USA GLOBAL

22 Orient Exchange LLC, UAE U.A.E

23 SBX Money Pty Ltd, Australia Australia

24 Wall Street Exchange Centre LLC, UAE U.A.E

25 Standard Co. (USA) Inc. (DBA Standard Express), USA U.S.A

26 Placid Express, USA GLOBAL

27 IME Remit, Inc. USA U.S.A

28 Prabhu Money Transfer Sdn. Bhd., Malaysia Malaysia

29 Aussie Forex & Finance Pty.Ltd. Australia

30 Bank Al-Bilad KSA

Exchange Houses with Anywhere payment option

SL Name of Exchange House Sending Country

1 Xpress Money GLOBAL

2 Prabhu Money Transfer, U.S.A. GLOBAL

3 Western Union Money Transfer, U.S.A. GLOBAL

4 Trans-Fast Remittance LLC, USA GLOBAL

5 Placid Express, USA GLOBAL

Country wise Exchange Houses having arrangement with DBBL

SL. Country No. of arrangements

1 Australia 2

2 Bahrain 1

3 Canada 1

4 KUWAIT 2

5 Qatar 2

6 Malaysia 1

7 Oman 2

8 U.A.E 8

9 U.S.A 9

10 U.K 1

11 KSA 1

12 Spain 1

Wage Earners remittances’ for 3 years :

Wage Earners’ Remittance for 3 yrs - DBBL

Exchange Houses under process for arrangement

SL. Name of Exchange House Country

1 Al Amoudi Exchange Co. KSA

2 RIA Financial Services USA

3 Speed Remit Worldwide Ltd UK

4 GPL Remittance Pte Ltd. Singapore

5 Al-Sadd Exchange W.L.L Qatar

6 Bahrain Financial Exchange Kuwait

7 Rupali Exchange Inc. USA

8 Kyodai Remittance Unidos Co. Ltd. Japan

9 International Remittance Pte Ltd Singapore

10 Saudi American Bank (SAMBA) KSA

11 Merchantrade Malaysia

12 BFC Exchange Limited (EZRemit) Bahrain

13 Oman UAE Exchange Oman

14 IME Malaysia

Thank you

Documents

Remittance Payment