FOREIGN REMITTANCES SECTION
(INWARD & OUTWARD)
Foreign remittance, in simple terms, means money remitted in foreign currency. More precisely, it is termed as remittances in foreign currency that are received in & made out abroad. Conceptual Issues International remittances are defined as the portion of migrant workers’ earnings sent back from the country of employment to the country of origin (ILO, 2000). Remittance can also be sent in kind. Transfers that take place in kind is quite difficult to measure.
Remittances can be individual and it can also be collective. When, individuals send remittance to his/her household or kith and kin that can be termed as individual remittance. When a group of migrants, their associations or professional bodies oblige resource together and send for collective or community programs that can be termed as collective remittance. Individual remittances are mostly geared towards the family whereas collective remittances are generally used for community development.
Transfer of remittances takes place through different methods. 46% of the total volume of remittance has been channeled through official sources, around 40% through hundi, 4.61% through friends and relatives, and about 8 percent of the total was hand carried by migrant workers themselves when they visited.
Two types of Foreign remittance:-
1. Foreign Inward Remittance
2. Foreign Outward Remittance
From the trend analysis of wage earners remittance inflow we can see that the remittance is increasing day by day. In the month of July(FY’2006-07) the remittance inflow was 412.80 million dollar where as in the month of July(FY’2007-08) the inflow was 567.11 million dollar.
Wage Earners Remittance Inflows (Yearly)
|*: data up to month of April of financial year 2007-2008.|
| Source : Foreign Exchange Policy Department, Bangladesh Bank|
Foreign Inward Remittance 3.1 FOREIGN INWARD REMITTANCE
The remittance of freely convertible foreign currencies which we are receiving from abroad against which the Authorized Dealers making payment in local currency to the beneficiaries may be termed as Foreign Inward Remittance.
MODE OF INWARD REMITTANCES (Also Outward Remittance):
The following are the mode of Inward/Outward Remittances.
i) TT = Telegraphic Transfer.
ii) MT = Mail Transfer.
iii) FD = Foreign Drafts.
iv) PO = Payment Order.
v) TC = Travelers’ Cheque.
vi) EFT = Electronic Fund Transfer
vii) FCN = Foreign Currency Notes.
viii) OLR = on line Remittances.
A remitter abroad simply has to approach a bank branch there with certain amount to be deposited beneficiary in Bangladesh either in foreign currency or in equivalent Taka currency. The Branch so approached abroad usually should have agency arrangement with the paying banks in Bangladesh. However, in the absence of any such agency arrangement, remittance may also be made by transferring cover value of the remittance to the paying bank’s account abroad by the remitting bank.
SOURCE OF INWARD REMITTANCE:-
i) Expatriate Bangladeshis.
PURPOSE OF REMITTANCE:
In short, remittances are being sent from abroad for the following purposes:-
Recruiting Agents Commission
Realization of Export Proceeds
Export broker’s Commission etc.
PURCHASE OF DRAFTS & CHEQUES:
Authorized Dealer may purchase Drafts & Cheques which are not drawn on AB Bank at the request of the beneficiary.
To make entry in foreign bills Collection Register
To prepare forwarding schedule.
To prepare vouchers on realization.
PAYMENT OF FOREIGN CURRENCY NOTES:
Authorized branches of the bank are to make payment of F.C. notes in equivalent Taka currency at the prevailing rate (T.T. Clean buying rate).
Generally, three foreign currencies namely U.S. Dollar, Pound Sterling and Euro are being bought and sold along with two other currencies like K.S.A. Riyal & Kuwaiti Dinar.
FOREIGN OUTWARD REMITTANCE
The remittances in foreign currency which are being made from our country to abroad is known as foreign outward remittance.
PURPOSE OF OUTWORD REMITTANCE:-
To settle Import Payment.
To meet Travel Expenses/Medical Expenses/Educational Expenses etc.