Bangladesh has seen steady growth in remittance inflows, but experts are emphasizing the urgent need to block informal money transfer channels to maintain this momentum. As remittances play a crucial role in stabilizing the country’s foreign currency reserves and supporting countless families, strengthening formal systems is more important than ever. In recent months, remittance earnings have shown promising signs, with a noticeable rise in transfers made through official banking and mobile financial service (MFS) channels. This positive trend has been largely driven by policy incentives, technological upgrades, and increased awareness among expatriate workers. However, the continued use of informal methods, such as hundi, poses a threat to long-term sustainability. Informal money transfers bypass the banking system, meaning that these funds do not contribute to the country’s official foreign reserves. According to analysts, a significant portion of total remittances still flows through such unregulated networks, undermining the benefits the nation could derive from legitimate channels. To tackle this issue, experts have called for more effective monitoring, better law enforcement coordination, and increased digital access for both senders and recipients. They also recommend making formal remittance services more attractive by reducing transfer costs and improving speed and convenience. Government initiatives such as cash incentives for remittances sent through official channels have already helped redirect some funds from informal routes. But to achieve sustainable growth, these efforts must be accompanied by targeted awareness campaigns and infrastructure improvements, particularly in rural areas where banking access remains limited. Additionally, mobile financial services like bKash and Nagad have proven instrumental in expanding the reach of formal transfers. These platforms enable quick and secure remittance delivery, even to remote regions, contributing significantly to the rising inflow figures. Strengthening these digital solutions can further reduce reliance on risky informal systems.Formal remittance inflows offer many extensive advantages. They support national economic development, improve household incomes, and enable access to education and healthcare for millions of families. Moreover, they play a key role in maintaining economic stability amid external pressures, including trade deficits and global inflation. To secure these gains, a multi-pronged strategy is needed—one that includes modern technology, strong regulatory frameworks, and public engagement. By focusing on closing the gaps that allow informal channels to thrive, Bangladesh can ensure that its remittance sector continues to grow and support national development.
