BB to launch new pension scheme for NRBs

Bangladesh Bank plans to introduce a pension scheme for non-resident Bangladeshis (NRBs) soon to lure more of their earnings into the country.  

The scheme will run alongside the 'US Dollar Bond' that is already in place for the NRBs, Governor Atiur Rahman said at a seminar on remittance in Washington on Saturday.

 "It would attract yet more NRB remittance away from the overheating real estate market into much needed long term savings for financing of long term funds," Rahman said in a statement.

The central bank will send a proposal to the finance ministry to introduce the new scheme for NRBs, a BB official said. 

The number of NRBs working abroad is estimated at 8.6 million, according to a Bangladesh Bureau of Statistics survey in June 2013.

Remittance inflows from NRBs now average around $14 billion a year, accounting for more than 8 percent of GDP.

Electronic fund transfers and mobile phone/smart card-based deliveries have been enabled by BB-led modernisation of the payment systems; financial sector IT infrastructure has cut remittance costs and delivery times.

Facilitation of the formal channels of remittance have driven the estimated share of informal channels down from 60 percent in 2000 to below 20 percent by 2010, and presumably further lower by now, he said.

Around 60 percent of the inflow spent on household consumption is supporting growth; the remaining 40 percent is going into savings and investments, Rahman said.

The bulk of investment outlays from NRB remittance are in the private sector, much of it in real estate, with only a small part in government securities.