04 Sep 2024
Millions of Bangladeshis are living and working in foreign countries including in Germany, due to the country’s robust economy. Bangladeshi migrants living in Germany send money online to Bangladesh from Germany to offer financial support back home. You have been doing it for years now.
The regulatory framework established by the government of Bangladesh significantly facilitates the processing of inward remittances. This comprehensive system, while complex, ensures efficient and secure transactions. By the end of this blog, you will gain a clear understanding of how these regulations streamline remittance processing, providing benefits such as reduced fees, better exchange rates, and enhanced security measures. This regulatory support plays a crucial role in ensuring that remittances are processed smoothly and effectively, contributing to the financial stability of recipients in Bangladesh.
When you transfer funds from Germany, or any other foreign country, for that matter, to Bangladesh, you normally look for certain features that your service provider offers. There are times when you do not get what a service provider offers you. In such a scenario, there is little you can do particularly if a regulatory framework does not exist.
Service providers may occasionally fail to meet their commitments, leading to concerns for customers. In such cases, the regulatory framework plays a crucial role in ensuring accountability and protection. This framework enforces compliance and safeguards the interests of users by regulating service providers' operations. It ensures that any discrepancies or failures are addressed promptly, providing a safety net for customers. By understanding and leveraging this regulatory support, customers can trust that their transactions are secure and that their rights are protected. Below is how the government of Bangladesh is evolving its remittance regulatory framework to facilitate every money transfer from Germany to Bangladesh.
Anti-Money Laundering (AML) is an area within the larger financial realm that every country’s financial institutions are pretty concerned about.
Funding illegal activities such as terrorism, at a large scale, is easy through money laundering, which is even easier through cross-border financial transactions if these are:
Therefore, the Bangladeshi government ensures that every financial institution operating in Bangladesh strictly follows the AML policies and is handed down stern punishments in case of transgression.
In Bangladesh, all financial institutions, including banks and online remittance services, are legally required to follow Know Your Customer (KYC) procedures. This means you must provide your personal information and that of the beneficiary to facilitate transactions. It is crucial to ensure that the service provider you choose operates within the legal framework to safeguard your identity.
Using unauthorized or illegal services can expose you to significant risks, including potential misuse of your information. Always verify that your remittance service provider is compliant with regulatory standards to ensure secure and lawful transactions. The remittance regulatory framework mandates financial institutions to share certain bits of their customers’ identity with the regulatory authorities for the record.
The ebb and flow of inward remittances to Bangladesh has been monitored closely by the Central Bank of Bangladesh. The Central Bank of Bangladesh is responsible for ensuring strict compliance with the regulatory framework for remittances. Whatever changes make their way into the existing framework, the Central Bank ensures seamless compliance. The bank has the authority to call in certain government agencies for assistance, in case the need arises in the course of ensuring regulatory compliance.
The government of Bangladesh is creating lax and financially friendly policies for the remittance transfer service providers to operate in the country. The existing financial paraphernalia is insufficient to cater to the needs of an increasing number of Bangladeshis going to Germany to earn a living and send money to Bangladesh from Germany.
Furthermore, since online money transfer companies such as ACE Money Transfer specialize in these services alone, unlike banks whose many financial services and products include online money transfers, the difference between services is stark.
With particular emphasis on online money transfers, the companies are encouraged as they offer speed, convenience, competitive currency exchange rates, and charge a low fee as compared to banks.
The core objective of creating a remittance regulatory framework in Bangladesh or elsewhere is to facilitate you when you send money online. But as the needs to send funds online across borders keep changing and evolving so do the regulatory frameworks.
Therefore, the remittance regulatory framework in Bangladesh aims to cater to the ever-evolving needs and requirements of the people sending and receiving remittances in the country.
For example, if the customers demand prevention from online financial fraud, the regulatory framework will ensure that the service providers consider this demand and revise their security parameters accordingly, while also allowing them their operational autonomy.
Learn here more about fraud awareness, common online scams, and tips for online safety.
One of the biggest hurdles a business faces while establishing itself in a new country or a new environment is the tax policies and the rates of taxation. A business or firm gets wary of complicated taxation policies and also of higher rates of taxes.
In this context, the government of Bangladesh is ensuring that the tax landscape is not complicated for the companies and businesses that want to be established in Bangladesh to offer services in the realm of the remittance industry.
In addition, the rate of tax startups in the industry have to pay to the government is kept at a bare minimum to encourage them to operate, offer services, and facilitate inward remittances to Bangladesh.
The latest initiative the government of Bangladesh has taken is a crackdown on illegal financial institutions that are offering services in the realm of inward remittances. The drive is already ongoing, but recently, the intensity and frequency of the drive have only increased.
As a result, several unscrupulous financial institutions have been apprehended that were fleecing customers by using varying modus operandi at different levels. The government has confiscated their licenses, sealed their offices, and arrested the operators.
This has also sent out strong signals for other service providers to ensure strict and seamless compliance with the remittances regulatory framework put in place by the government of Bangladesh.
When you make an online money transfer from Germany to Bangladesh you look for several service features like low fees, competitive currency exchange rates, and so on. But little do you consider about the regulatory compliance of the service provider you choose.
You should, therefore, attach due importance to how strictly your service provider complies with the regulations governing remittances because, through this, you can hope to get all the features you want from your chosen online remittance transfer service provider.
In most cases, what you look for is low service charges, swift transactions, safety, ease and convenience to access the services, and live and market-competitive currency exchange rates to make up for whatever small fee you pay in the process. Additionally, reliable customer support can significantly enhance your overall experience by resolving any issues or questions efficiently.
A remittance regulatory framework refers to a set of policies a government devises and implements through its financial institutions. The major financial institutions for this purpose, in most countries, are the Central Banks through which the governments regulate the remittances within the larger financial landscape.
The existence of such a framework is essential because it helps regulate the financial landscape, and ensures that every financial institution operates within the stipulated laws and regulations which helps the governments with better monitoring of the remittance industry.
The key benefits of such a framework include better monitoring of the remittance industry, marginalising online financial fraud, holding unscrupulous financial institutions accountable, facilitating customers, the presence of a redressal mechanism in case something goes wrong in the process of sending funds online, and so on.
Bangladesh’s remittance regulatory framework benefits you in multiple ways, such as offering safety against online scams and fraud, getting the best online money transfer deals in terms of paying low fees and getting live and market-competitive currency exchange rates, operational transparency, and tight financial monitoring.
Bangladesh’s government is taking several initiatives to evolve its remittance regulatory framework, such as lax taxation policies, encouraging legal businesses to establish in the country, strict anti-money laundering policies (AML), thorough Know Your Customer (KYC) procedures, crackdown on illegal channels, and catering to the evolving demands of customers.
Resource(s)
· Bangladeshi Diaspora
(Bangladeshi Diaspora: Cultural Practices and Development Linkages | SpringerLink)
