Remittance flows through legal channels are declining due to re-introduction of illegal channels

Remittance flows through legal channels are declining due to re-introduction of illegal channels

Analysts believe that the target of 26 billion in remittance income will not be met in the current financial year. According to them, the hundi business is booming again as the official exchange rate of money against the dollar is lower than in the open market. As a result, the flow of remittances through legal channels is decreasing.

In the first six months of the current financial year, remittances to the country have reached 1,023 crores or just over 10 billion. However, at the same time in the previous fiscal year, which was about 12 billion dollars. Bankers think that even if cash is increased to 2.5 percent in remittances, it will not have much effect. They also say that it will be difficult to surpass the record of remittances during the Corona period this year.

According to BMET, the rate of emigration in the first phase of the outgoing year was relatively low. However, towards the end of 2021, the flow has increased. Analysts say it will also take time for new expatriates to add income.

Analysts say remittances have reached a record 24 billion due to the closure of illegal channels in Corona. With the introduction of hundi again, it will be difficult to increase remittance flow with cash only. In this situation, to encourage remittances in a legal way, analysts are also suggesting an attractive investment scheme for expatriates besides ensuring exchange rates at open market rates.