Dhaka:Bangladesh Bank (BB) is considering opening branches of Bangladeshi banks in the Maldives and establishing alternative currency settlement arrangements to facilitate remittance transfers by expatriate workers through formal channels.
According to Bangladesh Sangbad Sangstha, a senior BB official stated that Bangladesh Bank Governor Md Mostaqur Rahman has sent a letter to Ahmed Munawar, governor of the Maldives Monetary Authority (MMA), seeking cooperation to improve remittance transfers and banking services for Bangladeshi migrant workers. The official noted that they are awaiting a reply.
Bangladesh Bank recently held an online meeting with the Bangladesh mission in the Maldives to discuss this initiative. Some private commercial banks in Bangladesh, including BRAC Bank and National Bank, have conducted feasibility studies on establishing branches in the Maldives. Banks from Sri Lanka, Pakistan, and India already operate branches in the Maldives, providing a potential reference for Bangladesh's efforts.
The proposed expansion aims to improve expatriates' access to banking services and facilitate easier transfer of their earnings to Bangladesh through authorized channels. Establishing branches would require regulatory approvals and cooperation between the relevant authorities in both countries.
In fiscal year 2025-26, Bangladesh received around $118 million in remittances from the Maldives, down from $141.1 million the previous year, marking a 16.4 percent decline. During the first three months of the current fiscal year, Bangladesh received $38.05 million in remittances from the Maldives. This decline and the challenges faced by expatriates in transferring earnings have prompted Bangladesh Bank to explore measures to make formal remittance services more accessible, affordable, and efficient.
Bangladesh Bank has proposed three mechanisms to facilitate remittance transfers from the Maldives, including using the Maldivian rufiyaa under the Asian Clearing Union, allowing licensed banks and money transfer operators in the Maldives to make travel-related payments in rufiyaa for Bangladeshi nationals, and exploring a bilateral currency swap arrangement. These mechanisms would require regulatory approval and compliance with the laws of both countries.
More than 100,000 Bangladeshis work in the Maldives, but they face difficulties in sending money home due to reluctance from banks and exchange houses to accept the Maldivian local currency directly. This situation often leads workers to rely on informal markets, increasing remittance costs and reducing recorded remittances through Bangladesh's formal banking system.
The establishment of Bangladeshi bank branches in the Maldives, combined with proposed currency settlement mechanisms, could reduce reliance on informal markets and improve transparency. The implementation of these proposals will depend on the response of the Maldives Monetary Authority, regulatory approvals, and the development of arrangements between the two countries.