Remittance received accounts only for those sent through formal banking channel

Banking: Bhutanese working abroad has remitted a record high of about Nu 859 million (M) worth of foreign currencies into the country last year.

In 2014, the total inward remittance valued in local currency stands at about Nu 521M.

Remittance is the fund an expatriate sends to their country of origin. These peer-to-peer transfers of funds across borders are economically significant for many countries that receive them, for instance Nepal’s economy survive on remittance that forms 25 percent of their gross domestic product (GDP).

For Bhutan, entire inward remittance summed up does not even form a percent GDP.

However, the figures compiled by the central bank were extracted from the four commercial banks and exclude other channels like Western Union money transfer and informal means.

Inward Remittance from Australia has doubled from AUD 4.24M in 2014 to 8.73M last year. In 2013, remittance of AUD 240,000 was recorded.

This could be attributed to increasing number of Bhutanese leaving for Australia.

Last year alone, there are 101 Bhutanese studying in Australia through scholarship programmes. Ausaid recipients say that they could save around AUD 3,000 a month and their dependent earn separately.


If at least 100 Bhutanese residents in Australia remit their savings every month, it works out to AUD 300,000 a month and AUD 3.6M a year.

Add to it the saving of dependents, 100 couples could roughly save about AUD 5M a year. Considering the increasing number of people pursuing studies privately in Australia, the remittance could be much higher.

However, foreign currencies are brought into the country through informal channels. “We used to send money through people going back to Bhutan and take a bulk of the cash with us when we leave the country,” a corporate employee said. Australian law allows people to carry cash, if they are declared to customs at the time of exiting the country.

“Sending money through banks is killing us with high charges time consuming,” said a former Australia resident. “Unless there is an emergency, Western Union is also too expensive,” he said.

United States of America (USA) is another country from which inward remittance is quite high. Last year, about USD 6.6M has been sent from USA compared with USD 4.5M in 2014.

Bankers said that people are unaware of regulations in their country of residence. “All Banks in the country have their network with other foreign banks and remitting money is easy,” said a banker. “But charges differ from one country to another and from bank to bank.”

Another Bank official said inward remittance involved transaction between two or three foreign banks and sometimes it appears to be time consuming.

Remittance in form of Pound Sterling is negligible and Euro was recorded at Euro 80,000, a decrease of Euro 1,000 compared with 2014.

Druk PNB’s chief executive officer, Mukesh Dave said much of remittance is dependent on the exchange rates. “What a thousand Australian dollar fetches today would have fetched much more six month ago,” he said.

Many possessing foreign currency wait for the exchange rate to favour them.

However, local economists said that even if the foreign currencies are brought in informally, in the end it is invested backed into the economy.

For instance, people buy properties, construct houses or invest in businesses. “Although it doesn’t help the financial institutions directly, people are in a position to repay loans because they worked abroad,” said a businessman.

Tshering Dorji


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