Bangladesh encourages inward remittances with new banks

Dhaka, April 4 (IANS) Bangladesh's central bank has approved a proposal to set up three new commercial banks to boost inward remittances from its citizens living and working abroad.

The board of the Bangladesh Bank (BB) gave its nod to setting up of the Non-Resident Bangladeshis banks at a meeting Wednesday, Xinhua reported.

According to Khandker Mosharraf Hossain, the country's expatriates' welfare minister, remittance, a major source of foreign exchange for Bangladesh, contributes around 13 percent to its national gross domestic product (GDP).

With the establishment of new banks, the number of private and foreign banks in Bangladesh will rise to 50 from 47 already operational in the country, said a senior Bangladesh Bank official requesting anonymity.

"The establishment of banks by NRB investors will help us to receive more remittances in future from expatriate Bangladeshis as they will be encouraged to send home more money," said the official.

The contribution of NRBs by way of remitting valuable foreign exchange enables the country to maintain a stable external value of the local currency Taka.

Bangladesh's overall remittance surged to nearly $10 billion during first three quarters of the current Bangladeshi fiscal year (July 2011-June 2012).