The central bank has given permissions to three commercial banks to operate in Saudi Arabia, the biggest destination of Bangladeshi migrants, to help workers send their money home easily through the banking channel.
The Saudi government recently agreed to allow Bangladeshi banks to open branches there, in response to Prime Minister Sheikh Hasina’s request during her visit to the gulf country in June last year, said GM Abul Kalam Azad, general manager of communications and publications at the central bank.
The banks that were given approval are state-owned Janata Bank, shariah-based private bank Social Islami and conventional private bank Standard, Azad said.
Social Islami Bank and Standard Bank got the go-ahead in October last year, while Janata in November, according to officials at Bangladesh Bank.
The three banks have submitted their applications to the Saudi Arabian Monetary Authority for licences. This will be the first time that Bangladesh is going to provide banking services directly to 28 lakh Bangladeshi migrants living in Saudi Arabia.
Bangladeshi migrants will be able to open accounts with the banks and get capital support to do business.
The BB has selected three cities — Makkah, Jeddah and Riyadh — to let the banks open branches as most migrants live there. Currently Janata Bank has one branch in Dubai.
AMM Farhad, additional managing director of Social Islami Bank, said, “We have formally approached the Saudi government for a licence. Some other processes are ongoing and we hope to begin operations within a month or two.”
The main objective of the banks will be to facilitate the flow of remittance, he added.
Moreover, a Bangladeshi business community has been developed in Saudi Arabia and they are facing difficulties in getting easy loans from foreign banks.
The Bangladeshi banks will provide banking services to them, including deposits and loans, he said.
The central bank invited applications from banks interested in opening branches in Saudi Arabia in July last year and got responses from 15 banks.
The central bank selected the three by evaluating their CAMELS (capital, assets, management, earnings, liquidity and sensitivity) ratings. The inflow of remittance from Saudi Arabia fell 11 percent year-on-year to $1.36 billion in 2016, despite a rise in the number of migrants going to the gulf country, according to the Bureau of Manpower, Employment and Training.
The number of workers leaving Bangladesh for jobs in Saudi Arabia surged 146 percent year-on-year to 143,913 last year. Slow remittance inflows also prompted the BB to form a panel to find out the reasons behind the fall. A member of the panel will visit Saudi Arabia, the UAE, Malaysia and Singapore to get an idea about the causes.