A customer protection law should be framed to safeguard migrant workers, as the exclusivity clause limits the reach of remittance, migration analysts said yesterday.
The exclusivity clause also works against the economy in favour of big companies, they said.
The comments came at a dialogue on ‘Institutional and Regulatory Reforms on Remittance Management’ at Dhaka University.
Along with various types of banking methods such as demand drafts and telephonic transfer, the importance of cash-to-cash and spot cash has increased manifold, transaction managers said.
It promises to bring many out-of-bank customers under the formal money transfer system.
A bank already bound by agreements with a foreign transfer company that has inserted the ‘pay cash exclusivity clause’, cannot sign cash-to-cash or spot cash agreements with any other similar company, creating hindrance in establishing fair competition in the remittance transfer market, they said.
Refugee and Migratory Movements Research Unit (RMMRU) of the university organised the event, in association with Manusher Jonno Foundation, an initiative designed to promote human rights and good governance in Bangladesh.
Around 70 lakh Bangladeshis living abroad sent $10.97 billion in 2009-2010, up from $9.69 billion in the preceding fiscal year.
The exclusivity clause undermines the basic philosophy of fair competition and creates condition for the workers to send money through illegal channels known as hundi, said Tasneem Siddiqui, chair of RMMRU.
She said there is a need for a customer protection law in remittance transfer.
Siddiqui urged the central bank to encourage commercial banks to finance migration and also allow them to deploy representatives in the destination countries to facilitate remittance transfer.
Bangladesh Bank Governor Atiur Rahman said the absence of a competition law in the country has led to such undesirable situation. The central bank, however, will review the matter, he added.
The governor said the introduction of new technology in remittance transfer has had a significant impact on the volume of remittance to Bangladesh.
He urged the private and state banks to collaborate with each other to provide best possible services to the remitter and their families at the minimum possible cost.
Rahman also urged the banks to develop investment products for returnee migrants under their small and medium enterprise scheme.
Sanjay Prakash, chief executive offer of HSBC Bank, recommended a liberalised regime to attract non-resident Bangladeshis’ investments in the Bangladesh’s economy.
Speakers also said a few multinational money transfer agencies, such as Western Union, are enjoying near monopoly control on local banks through exercising the exclusivity clause.
They demanded termination of such clause for facilitating increased inflow of remittances.
Zafar Ahmed Khan, expatriates’ welfare and overseas employment secretary, said although the remittance flow to the country has increased by 17 percent a year over the last decade, his ministry did not receive any commensurate resource allocation.
The bureaucrat urged the policy planners to reflect the contribution of the sector in the framing of the Perspective Plan and the future Five Year Development Plan.
Mustafizur Rahman, executive director of Centre for Policy Dialogue, termed migration as a cross-cutting issue and said investment opportunities such as mutual funds should be created so that remittances of the short-term migrants could be better utilised.
In his presentation, CR Abrar, a Dhaka University teacher, regretted that the contribution of migrants has not been duly acknowledged in the country’s planning documents. He called for mainstreaming migration issue in the development plans.
Md Abdur Rahman Sarker, managing director of National Bank Ltd, said local banks are allowed to represent more than one exchange house in many countries, so there is no reason why the same cannot be practised in Bangladesh.
It will bring down the cost of remittance transfer substantially, he said.
Shaheen Anam, executive director of Manusher Jonno Foundation; Zaidi Sattar, chairman of Policy Research Institute, and Prof Shamsul Alam, member of the Planning Commission, also spoke.
