Sonali Bank going to open exchange house in Maldives

Sonali Bank going to open exchange house in Maldives

State-owned Sonali Bank has decided to open an exchange house in Male, the capital of the Maldives, to boost remittance inflow by 1.80 lakh Bangladeshi expatriates living in the island nation.

The bank has already applied with the finance ministry to open the new shop.

According to the application, Sonali’s board of directors approved the Maldives exchange house on 13 December last year, and decided to send a team to Male to verify the business viability. 

The delegation will return to the country and submit the report to Sonali Bank Managing Director and CEO Afzal Karim.     

The bank wrote to the finance ministry that although the Maldives has been at the 26th position in Bangladesh’s remittance list for the last three fiscal years, the amount of remittance is very low due mostly to the huge popularity of informal money transaction channel “hundi”. 

Besides, Sonali Bank says exchange houses in the island do not accept local Maldivian Rufiyaa thanks to its ongoing dollar crunch. Bangladeshi expats have to collect US dollars from the open market with at least 15% higher rates to send money home.         

Therefore, expatriates feel more comfortable sending remittances through Hundi as the cost is very high. Besides, as expatriates are spread over about 1,200 islands of the country, they have to go to exchange houses in cities for sending remittances through the formal channel.

Sonali Bank said it will collect remittances by appointing agents in Bangladeshi diaspora-dominated regions.

Sketching a probable organogram, the bank estimates the new shop would cost Tk1-1.5 crore per year.

Sonali Bank’s Foreign Remittance Management Division (FRMD) Co-ordinator and Deputy General Manager Munshi Zahidur Rashid said they have planned to send the delegation next month. 

After the assessment of the viability report, the Sonali will require separate approvals by the Bangladesh Bank and Maldivian authorities.

Munshi Zahidur Rashid said they are trying to open the exchange house as soon as possible. “As we have reviewed, the new exchange house will reduce the cost of money transfer by Bangladeshis and boost the country’s remittance inflow.”

Sonali Bank reported Bangladeshi nationals staying in the Maldives sent $46.03 million home in FY21, with only $2.01 million through the bank. This amount decreased in FY22 to $21.59 million. In the first six months of the current fiscal year, Bangladeshi expats sent approximately $10 million home from the Maldives. 

National Bank’s “NBL Maldives” – the lone exchange house owned by Bangladesh in the Maldives – has been in operation since 2011. Besides, expatriates send remittances to Bangladesh through various foreign exchange houses.

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