This means the country received well over Rs 100 billion from overseas workers last year without being recorded in the national accounts. And what is unfortunate for the country is this figure will only grow this year if the government does not take steps to boost people´s confidence in the banking system, added Nepal Remitters Association (NRA) officials. [break]
Nepal had received some Rs 209 billion worth of remittances in fiscal year 2009/10. It has received some Rs 164 billion during the first nine months of the current fiscal year.
“The reality is that workers send more than Rs 300 billion to their families back home. But due to the lack of due promotion of formal remitters, billions of rupees is entering the country in an unaccounted fashion,” said Chandra Dhakal, NRA president.
He cautioned that hundi -- which has been facilitating unaccounted inflow of money -- was also facilitating illegal transfer of foreign currency out of the country.
Dhakal said that 52 formal remitters operating in the country charge Rs 200-400 for a single inward remit transaction. “If we waive this off, I am sure more Nepali workers will take the services of banking system,” he said.
Bhaskar Gyawali, executive director of Nepal Rastra Bank (NRB), said that the government is currently discussing about bearing the remittance service charges.
The central bank officials also noted that the provision whereby the central bank pays additional 27 paisa per US dollar while exchanging foreign currency received through remittances was in fact ensuring better returns to the workers through formal system.
“It is because of this incentive, we are receiving huge remittances through banking system,” said former Deputy Governor Krishna Bahadur Manandhar, referring to past findings which showed that Nepal was actually receiving only some 20 percent of workers´ remittances through formal channel.
Economists like Dr Chiranjibi Nepal viewed that the number of overseas workers and remittances transfer would only continue to grow in the country in the medium term, and urged the government to take concrete steps to better manage the sector.
They also laid emphasis on the need to create avenues whereby the overseas workers could productively use their income in the country. Recent researches show that workers and their family members back home spend 60 percent of remittance income on general consumption and save the rest.
Experts also requested the government to allow manpower agents to market Nepali workers and open outward remittance of foreign currency for repaying commissions to overseas agents who help Nepali agencies secure foreign jobs.
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