Shahin Howlader
For years, remittances — the lifeline of Bangladesh’s economy — had been caught in a worrying slowdown. Despite millions of hardworking migrant workers across the globe, the official inflow figures consistently fell short of expectations, especially in the current decade. Much of the decline could be traced to two persistent issues: the rise of illegal money transfer networks such as hundi, and bank regulations that were often slow, cumbersome, and unfriendly to genuine remitters.
However, a remarkable turnaround has begun to take shape since August 5, 2024, driven by decisive reforms under the interim government and the Bangladesh Bank’s sharper focus on curbing informal transfers.
Expatriate Bangladeshis sent $2.48 billion home in July of the new FY 2025-26, kickstarting the new fiscal year on a positive start.
Data analysis shows that this income is 29.48% higher than the same month last year. In July 2024, $1.91 billion in remittances came into the country.
In July last year, expatriates reduced remittances by calling on social media to protest political unrest.
Later, after the political changes, the remittance flow started increasing again.
Earlier, in June, expatriate Bangladeshis sent remittances of $2.82 billion to the country, which was 11% more than the same period of the previous year.
According to Bangladesh Bank, at the end of the fiscal year 2024-25, remittances came to the country at $30.33 billion, which is about 27% more than the previous fiscal year.
Remittances in the fiscal year 2023-24 came at $23.74 billion.
Bangladesh’s gross foreign currency reserves reached USD $31.683 billion by the end of FY2024-25 due to a record inflow of remittances in the recently-concluded fiscal year.
Bangladesh Bank’s latest data shows that expatriate Bangladeshis sent a total of USD $30.32 billion in remittances, up 26.81% year-on-year and the highest ever in a single fiscal year in the country’s history.
It can’t be compared with earlier record of FY21, during the Covid-19 pandemic, when remittances spiked due to restrictions on informal hundi channels and the introduction of incentives, because during this time, the reserve has come to such a strong position, even after paying off a huge amount of foreign debt and various payments.
The highest reserve in the history of Bangladesh was $48.06 billion, recorded on August 24, 2021.
The Decline Before the Rise
In the fiscal years leading up to 2024, Bangladesh’s remittance story was far from encouraging. Migrant workers continued to leave for overseas employment, but the official figures did not reflect the volume of money actually sent home. A significant share of remittances was being routed through hundi networks, which offered better exchange rates and instant delivery without the perceived hassle of formal banking channels.
Between FY2019–20 and FY2021–22, official remittance inflows fluctuated without a clear upward trend. While FY2020–21 saw a temporary spike to about USD $24.77 billion — largely due to incentives and Covid-era travel restrictions limiting informal transfers — the momentum soon faded. By FY2022–23, the figure had dipped to around USD $21.61 billion. Many banks were still charging high fees, offering uncompetitive exchange rates, and requiring excessive paperwork, which discouraged migrant workers from using official channels.
A look at the last 10 fiscal years tells a clear story:
- FY2014–15: USD $15.31 billion
- FY2015–16: USD $14.93 billion
- FY2016–17: USD $13.53 billion
- FY2017–18: USD $14.98 billion
- FY2018–19: USD $16.42 billion
- FY2019–20: USD $18.20 billion
- FY2020–21: USD $24.77 billion
- FY2021–22: USD $21.03 billion
- FY2022–23: USD $21.61 billion
- FY2023–24: USD $21.02 billion
This stagnation was especially frustrating because the potential for higher remittance inflows was undeniable. The problem was not the lack of earnings abroad — it was the leakage to informal systems and the lack of a competitive, user-friendly formal system at home.
A New Approach After August 5, 2024
Everything began to shift after the interim government assumed office after the Mass Uprising on August 8, 2024. Recognizing remittances as a national economic priority — especially in a time of foreign currency pressure — Bangladesh Bank introduced a series of targeted measures.
First, strict crackdowns were launched on hundi operators both domestically and in key overseas labor markets. Law enforcement agencies worked closely with foreign counterparts to disrupt illegal remittance channels, making it riskier and less attractive for workers to bypass banks.
Second, the Bangladesh Bank ordered commercial banks and money transfer agencies to make their services faster, cheaper, and more transparent. Margins on exchange rates were tightened to ensure migrant workers got more taka for every dollar sent. Transaction fees were reduced, and same-day crediting of remittance funds became a standard requirement.
Third, the government strongly enforced cash incentives for remitters, with the rate of 2.5% for those using formal channels. In addition, digital remittance systems were expanded, allowing workers to send money through secure mobile banking apps linked directly to the banking system.
The impact was immediate. In the months following these measures, remittance inflows began to climb steadily. According to Bangladesh Bank data, by the first half of FY2024–25, official remittances had already surpassed USD $12 billion — a sharp year-on-year increase.
Why This Revival Matters
Remittances are not just foreign exchange inflows; they are an economic stabilizer. They account for over 6% of Bangladesh’s GDP, support millions of rural households, and provide a cushion against trade deficits. The revival after August 2024 is significant because it shows that targeted, coordinated policy can reverse years of decline in a short time.
The crackdown on hundi networks has been particularly critical. In the past, the informal sector could undercut banks on rates and speed. Now, with stronger enforcement, banks have been forced to innovate and compete — something that should have happened years ago.
Moreover, the improved remittance environment has sent a positive signal to the overseas Bangladeshi community: the government is finally listening to their concerns. Migrant workers, often called “the silent heroes” of the economy, are seeing tangible benefits from sending money home legally.
Sustaining the Momentum
While the revival is real, sustaining it will require continued vigilance. Bangladesh Bank must ensure that banks and licensed money transfer operators keep rates competitive and processes simple. Any re-emergence of bureaucratic red tape or hidden charges will push workers back towards informal channels.
Expanding digital remittance solutions will also be key, especially for younger, tech-savvy migrant workers. Linking international money transfer services with mobile financial platforms like bKash and Nagad can make sending money as easy as sending a text message.
Finally, the government should work on bilateral agreements with major labor-receiving countries to make remittance transfers cheaper and faster, possibly through dedicated remittance corridors. Such agreements could also include worker welfare clauses, strengthening the bond between expatriates and their homeland.
The events since August 5, 2024, have shown that with the right policies, a revival is possible — even in a sector long plagued by inefficiencies and leakages. Bangladesh now has a golden opportunity to cement this growth, ensuring that remittances not only boost foreign reserves but also continue to improve the lives of millions of families. If this momentum is maintained, the “silent heroes” will not just be sending money; they will be building the future of Bangladesh.
Bangladesh’s remittance lifeline finds new strength after political upheaval – The Bangladesh Today