Incentives Drive Record Remittance Growth Ahead of Eid

In a strong show of economic resilience, Bangladesh has witnessed a record surge in remittance inflows ahead of Eid-ul-Azha in June 2025, thanks largely to a government-backed 2.5% cash incentive on remittances sent via official channels. According to data from the Bangladesh Bank, remittances reached $2.97 billion in May 2025, marking a 32% year-on-year growth, and the second-highest monthly inflow in the country’s history. This trend signals both renewed confidence in formal financial systems and the growing effectiveness of targeted government policies to channel expatriate earnings into the official economy. The 2.5% remittance incentive, introduced in previous years and continued into 2025, plays a crucial role in this development. The policy rewards Bangladeshi expatriates for using banks and licensed mobile financial services, offering an additional cash amount on top of their transferred funds. For instance, if an expatriate sends BDT 100,000 through an authorized service, the recipient receives BDT 102,500 a clear and simple benefit. With more than 13 million Bangladeshis living abroad, remittances are a cornerstone of the national economy. The government’s consistent support through incentives has helped reduce the use of informal channels like hundi, which previously diverted billions away from official systems. By making legal transfers more rewarding and accessible, the remittance sector is not only boosting foreign reserves but also strengthening financial transparency. The adoption of digital platforms has further amplified these gains. Services like bKash, Nagad, and bank-based remittance portals now allow instant, secure transfers, even in rural areas. This ease of use, combined with the cash incentive, has made formal remittance not just viable but preferable. The spike in remittances also contributes to macroeconomic stability. It eases pressure on the foreign currency reserve, supports the balance of payments, and helps stabilize the exchange rate all vital for a country reliant on imports and exports. Looking ahead, experts suggest maintaining or even expanding the incentive system, particularly during peak remittance seasons such as religious holidays or academic admission periods. The current model offers a promising template for how policy, technology, and diaspora engagement can combine to create lasting national impact.