Remittances to Bangladesh have been growing steadily over the last decade. Since its independence in 1971, more than 3 million Bangladeshis have left the country in search of employment. The central bank estimates their cumulative remittances during 1976-2003 at round US$22 billion (Azad, 2005). Recognizing their economic importance, the government for years has had legislation, policies, and an institutional structure in place to facilitate the migration of its citizens. Now the question is why sudden importance is put into the perception of remittances? The fact is that the absolute and the relative volumes of workers’ remittances are increasing. They have shown a steady increase over the last decade. The amount of remittance flows to developing countries already surpassed that of official resource inflows. Since 1999, workers’ remittances have been the second largest resource flowing into developing countries after foreign direct investment (FDI). In addition workers’ remittances are not liabilities but cash transfers from overseas, which in principle, they do not cost any to recipient countries. As there has been much debate about external debt and its negative effect on growth, this feature is very attractive force. Despite the growing interest in workers’ remittances, the role of remittance in development and economic growth in general is not clearly understood. For example, studies based on a country’s time-series data tend to find positive impacts of remittances on growth, but a cross- country/panel data study by Chami et al. (2003) shows the opposite outcome. This is still one of the least studied areas of research in migration literature. Despite the expanding literature on the subject, there remains an inadequate understanding of a number of issues related to the flow and use of remittances. Thus, there has been little work on the impact of remittances on the overall economy. The major labor exporting countries follow different conventions on whether to include remittances from overseas workers as a part of the net factor income in national income accounts. The resulting GNP estimates (GNP= GDP + Net factor income from abroad) therefore are not comparable. Amongst the major Asian labor exporting countries, GNP estimates published by governments in India, Sri Lanka, and Thailand exclude workers remittances while Bangladesh, Pakistan and Philippines include them. In this report, an attempt has been made to clarify concepts relating to the affect of workers’ remittances on the overall economy of Bangladesh. As Bangladesh is among the few countries that include workers’ remittances separately in their gross national income estimates, it is important to identify the impact of remittance on the national economy. In order to understand the effect, this paper integrates remittance in the national income accounting framework. 1.2. Origin of the Report:
This is the final research paper that is made after the completion of 11 semesters as well as internship program; which is the last academic requirement for completing the 4 (four) years bachelor program in Business Administration. The main purpose of making this research paper is to learn practical knowledge based on the theoretical knowledge during the 4 (four) years bachelor program. I have been given the chance to work as an internee for 12 weeks in NCC Bank Ltd. Dhanmondi Branch on the report titled “Remittance & Foreign Earnings Operation of NCC Bank Ltd.” 1.3. Statement of the Research Problem:
Remittance is the second highest productive sector of GDP growth of Bangladesh after RMG (Ready Made Garment). So it has a great importance to the economic development of our country. The remittance process is a little complex and commercial banks cannot do all the necessary works to make it easier alone. So it has some problems and this is where I want to work with the help of my...