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Experts urge providing incentives to remittance senders to use banks

The Kathmandu Post, Nepal, 29 December 2021 - The government may need to set aside as much as Rs30 billion to incentivise Nepali migrant workers to send remittance home through formal channels, a top central bank official said.

Remittance inflows have been dropping sharply from the beginning of the current fiscal year, and alarmed stakeholders are calling for providing inducements to migrant workers sending money home to use legal financial systems.

Remittance is the largest source of foreign exchange for the country, and officials suspect that large sums of money are being diverted through informal channels using cash bonuses.

Nepal Rastra Bank Governor Maha Prasad Adhikari said that the central bank had received information from some stakeholders that migrant workers were being provided incentives of as much as Rs3 per dollar to lure them away.

As of the first four months of the current fiscal year, remittance inflows fell by 7.5 percent to Rs312.42 billion, according to Nepal Rastra Bank. A reduction in the inflow of remittance along with surging imports has led to a sharp depletion of foreign exchange reserves, according to the central bank.

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Source: https://kathmandupost.com/money/2021/12/29/experts-urge-providing-incentives-to-remittance-senders-to-use-banks

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