Inward remittance reaches US$ 1mn
Eight months after introducing RemitBhutan for non-resident Bhutanese living abroad, inward remittance reached US$ 1mn, which the Royal Monetary Authority (RMA) and financial institutions celebrated on Tuesday by lighting a thousand butter lamps at the Tashichho Dzong.
RemitBhutan was launched on September 21 last year by Prime Minister Tshering Tobgay as a landmark policy initiative to provide a platform for Non-Resident Bhutanese to remit their savings and earnings to Bhutan through the formal banking channel. The scheme is also an element of a broader financial inclusion
initiative, providing nonresident Bhutanese a platform to contribute to nation building.
So far, 637 foreign currency accounts have been opened with local banks, of which 54% is from Australia alone and the remaining from African, Middle East countries and the United States of America.
The facility has been appreciated by the members of armed forces on UN peacekeeping missions, youth working abroad under overseas employment programs, government diplomats and students, and their families living abroad.
RMA Governor Dasho Penjore said that nonresident Bhutanese living abroad can open a foreign currency account with zero balance.
Dasho Penjore also said that the users will be charged only the remittance charge that is they have to pay the host bank abroad which is minimal.
“Once the account is credited with foreign currency facilities like online shopping, remittance to local banks and credit and debit card facilities will be provided,” he said.
The debit card availed from foreign currency account can be used all over the world. However, withdrawal can be made only in the respective currencies. For example, withdrawal in Bhutan can be made only in Ngultrum, Rupee in India and Baht in Thailand.
Dasho Penjore added that the many Bhutanese are abroad for study and work, so the government is providing incentives to secure their savings within the country.
It is estimated that if all non-resident Bhutanese living abroad use the service for inward remittance, the remittance would reach US$ 10mn in a year,.
The RMA governor said that some of them have just opened the account and remitted only US$ 50.
Given the proven benefits of inward remittance on the country’s economic growth, a benchmark target to reach the US$ 1mn mark within one year of RemitBhutan’s formal launch in September last year was set. The central bank in collaboration with the government and the financial institutions sensitized Bhutanese residing in New York, Perth and Canberra on RemitBhutan. The government also approved the waiver of tax on individual fixed deposits in Bhutan effective from January 1, 2017 to make savings in country more attractive.
The Bank of Bhutan provides 0.25% higher interest rate on foreign currency accounts than the bank in Australia.
Further, the RMA in collaboration with the government launched the overseas education and skills development scheme on April 7 this year with the objective to provide more Bhutanese youth access to higher education and to gain meaningful employment skills which can be deployed upon return. Under this scheme, the banks provide loans up to Nu 1.5mn without collateral for youth working abroad. The repayment of the loan will be made through RemitBhutan accounts.