Despite grim predictions, remittance inflow stayed strong for the fourth straight month as expatriates sent home $2.15 billion last month, giving the country's economy some relief amid the pandemic.
The inflow went up by 9.53 percent from the previous month and 45.64pc from September last year, according to Bangladesh Bank data.
Experts attributed the rise in remittance to the government's two percent cash incentive for remitters.
They said the cash incentive, being disbursed since July last year, has encouraged remitters to send money through the formal channels, at a time when the "hundi" -- an illegal cross-boundary financial transaction system -- has stalled pushing the inflow through the banking sector.
They also said expatriate Bangladeshis in North America and Europe now send in a robust amount of remittance as interest rates on deposits in those countries have dropped to almost zero in the wake of the ongoing coronavirus-driven economic slowdown.
The experts, however, warned against complacency and advocated for building on the rising trend of inward remittance flow to achieve a sustainable future growth target in the sector.
More than one crore Bangladeshis live in about 160 countries. Most of them are low-paid migrant workers in the Middle East and Southeast Asian countries, who contribute a bulk of foreign currency in the state coffers.
Beating forecasts, Bangladesh has received as high as $1.83 billion in remittance in June, a record $2.59 billion in July and $1.96 billion in August, shows data from the central bank.
The World Bank in April had made a forecast that remittance flow to Bangladesh may plunge by as much as 22 percent in 2020 because of the fallout of the pandemic.
Each of the monthly remittance inflow was higher than that of any given month in recent years. The previous highest was $1.74 billion in May 2019.
Between the months of July and September, remittance hit $6.71 billion, up from 48.52 percent year-on-year.
"Travelling has almost come to a halt due to the ongoing pandemic and it has dealt a big blow to the hundi system," Zahid Hussain, former lead economist at the World Bank's Dhaka office, told The Daily Star.
The uptrend of export against the dwindling import and foreign loans, financial aids and grants has helped the financial sector enjoy a robust amount of foreign currency, he said.
Zahid, however, said that many migrants, who lost work opportunities in the host countries amid the pandemic, sent their last savings before returning home, which has given a boost to the remittance inflow.
Against the backdrop, the discrepancy in exchange rates of dollars between formal and informal sectors have declined significantly, encouraging remitters to send their hard-earned money through the legal banking system.
Finance Minister AHM Mustafa Kamal echoed a similar view and said expats previously sent 49 percent of the total remittance using the non-banking channels.
But the two percent cash incentive and an increase in distribution channels of remittance in the country have discouraged remitters to send their money using the non-banking channel that ultimately registered a shining growth in recent times, he added.
Ahsan H Mansur, executive director of the Policy Research Institute of Bangladesh, said interest rates on deposits have almost become zero in the US and European countries, encouraging the Bangladeshi diaspora living there to send more money to this country.
The Bangladeshi banks now offer more than five percent interest rates, way higher than the rates offered by those host countries, he said.
"Besides, the Bangladeshi expats now try to invest their idle funds in the country. Many of them are purchasing land here to use their fund in a fruitful manner," he said.
Mansur, also a former top official of the International Monetary Fund, thinks high remittance inflow from North American and European countries may continue in the years ahead as the nations would require more time to avoid the deadlock of zero percent interest rate.
'CONCERN IS TO HOLD ON TO IT'
Prof Selim Raihan, executive director of South Asian Network on Economic Modeling, said the recent growth was a positive sign considering remittance's importance in the country's economy and also because it happened during the pandemic.
"But the concern is to hold on to it," he told this newspaper by phone.
Pointing to the remittance growth achieved at the end of the outgoing fiscal year, Prof Selim, a teacher of economics at Dhaka University, said it was important that it continued towards the end of the year or the fiscal year.
The country received a record $18.20 billion in remittance in the last fiscal year, up from 11 percent year-on-year, shows BB data.
Saudi Arabia was the top remittance-generating country for Bangladesh in 2019-2020 with $4 billion, followed by the United Arab Emirates ($2.47 billion) and the USA ($2.4 billion), shows the data.
Other top remittance-generating countries included Kuwait, UK, Oman, Malaysia, Qatar, Italy, and Singapore.
Prof Selim Raihan suggested introducing "privilege cards" for remitters to encourage them to send more.
Mohammad Shams-Ul Islam, managing director and chief executive officer of Agrani Bank, said they received about $435 million in July and about $235-$240 million in August in remittance.
Agrani Bank is now the second highest remittance receiver after Islami Bank among all banks.
The bank usually received 10-11 percent of the total monthly remittance which increased to about 17 percent in July, he told The Daily Star by phone.
He termed the surge a "remarkable achievement" and said they have recently launched an app-based system in Singapore to reach Bangladeshi remitters.
Using the app, one can remit money staying at home, he said, adding the app would be launched in other countries as well.
Md Mahbub-ul-Alam, MD of Islami Bank, said both the government and the central bank should take initiatives to widen the volume of the remittance distribution channels so that the receivers get the fund easily.
The lender has received remittance worth $756 million in September, up 147 percent year-on-year.
The government should continue to provide cash incentives to remitters in the years to come so that remittance maintains the upward trend, he said.
Shariful Islam, head of Brac Migration Programme, said about one lakh migrant workers returned to the country amid the pandemic.
"They tried to remit their last penny before returning home," he said.
Prof Tasneem Siddiqui, founding chair of Refugee and Migratory Movements Research Unit (RMMRU), said the high remittance inflow did not necessarily reflect that all migrants remitted their earnings during the pandemic.
Inward remittance could be higher by ensuring engagement of more migrants in the formal channel, she added.
"This is a lesson to learn," said Prof Tasneem, adding more government initiatives were needed to turn remitters from "the informal flow towards the formal flow".