Eight months after the introduction of RemitBhutan, 637 Bhutanese living and working abroad have used this service to remit USD 1 million (M).
RemitBhutan is platform facilitated by the Royal Monetary Authority (RMA) for non-resident Bhutanese to operate foreign currency accounts with any authorised bank in Bhutan.
The government, RMA and banks celebrated the success by offering prayers and lighting 1,000 butter lamps for good health and success of Bhutanese living abroad.
However, going by the number of Bhutanese living abroad and their income, the country should be able to receive remittance of USD 10M if all non-resident Bhutanese use the RemitBhutan service.
The governor of the Central Bank, Dasho Penjore, said that with more Bhutanese going abroad to study and work, there are many incentives to secure their savings within the country.
For instance, Bhutanese living abroad can open a foreign currency account without any charge and zero balance. The only cost is the remittance charges that clients have to pay to the host banks abroad which is minimum.
Once the account is credited with foreign currency, all facilities like online shopping, remittance to other local and international banks and card facilities are provided.
Foreign account holders can hold or convert to local currency as long as they wish. In case the clients decide to convert and save in a fixed deposit, there is tax waiver.
The Bank of Bhutan, for example, gives 0.25 percent higher interest on RemitBhutan accounts than Common Wealth Bank in Australia. The debit cards availed from foreign currency accounts can also be used all over the world.
RemitBhutan also facilitates loan repayments.
This is an extended service to facilitate overseas education and skills development loan that was launched recently. Under this scheme, banks will provide a loan of up to Nu 1.5M without collateral for youth seeking jobs and training abroad. However, there are other criteria that labour ministry and agents have to fulfill.
Around 54 percent of the foreign currency accounts are from Australia alone.
While some Bhutanese workers have raised concerns that the facility might be used by the government to keep an eye on their income, an official from the Central Bank assured that full confidentiality of the accounts is guaranteed.
Under the confidentiality agreement of the banks, only the account holder and the bank have access to the respective accounts unless the account holder(s) authorise someone on their behalf. Apart from this, the Central Bank may have the authority to access the accounts in suspicion of illegal transactions.
Contribution from foreign remittance to the country’s GDP is marginal today. Should Remit-Bhutan help swell the inward remittances from the non-resident Bhutanese, the country could achieve new dimension to measure economic growth.
GDP is the total value of goods and services a nation produces over a specific time. The net income receipts from abroad, when added to GDP, provides a figure reflecting the country’s gross national product.