Exactly a year after the launch of RemitBhutan, the country received over USD 2M in remittances from about 850 Bhutanese living abroad against the initial target of USD 1M.
The USD 1M target was achieved last May, eight months after the introduction of RemitBhutan. The foreign currency accounts with local banks increased from 637 in May to 850 today.
RemitBhutan is a platform facilitated by the Royal Monetary Authority (RMA) for non-resident Bhutanese to operate foreign currency accounts with any authorised bank in Bhutan.
“RemitBhutan is now well established and the pace may increase with increasing number of youth going abroad to work,” the Central Bank governor Dasho Penjore said. “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. 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.
The governor also said that banks have started to offer attractive interest rates on the foreign currency account. Starting next month, the Bhutan National Bank (BNB) will revise its interest rates on Australian Dollar (AUD) from 0.25 percent to 2 percent. This is the highest interest rates offered on foreign currency account among the local banks.
The Bank of Bhutan (BoB) gives 0.25 percent higher interest on foreign currency accounts than the Common Wealth Bank in Australia. The debit cards availed from foreign currency accounts can also be used across the globe.
RemitBhutan also facilitates loan repayments. Dasho Penjore said that the recent initiative of the labour ministry to provide loans to youth to pursue overseas education and skills development will also boost remittances as loan repayment would be done through RemitBhutan.
The president of Association of Bhutanese in Perth said that the last visit of RemitBhutan delegates to Australia in February this year was a big eye opener for them to understand the scheme. “It’s an honour and privilege for the Bhutanese community in Perth to be one of the significant contributors to the noble initiatives such as RemitBhutan,” he said.
As of July 30, this year, around 48 percent of foreign currency accounts are from Australia alone contributing to a remittance equivalent to USD 966,536.
Remittance from African countries amount to USD 354,311 while it is around USD 224,435 from the United States of America.
Currency wise, there are 613 USD accounts. While there only 141 AUD accounts, the amount of remittance is highest in AUD. Seven accounts pertain to Euro and 88 chose Ngultrum.
BoB has about 693 accounts, followed by 121 with the BNB. Druk PNB has 21 foreign currency account holders and T-bank has 14. BoB has received the highest remittance of USD 1.56M of the total USD 2M.
While some Bhutanese workers have raised concerns on the government using its authority to track their income, the governor assured that full confidentiality of the accounts is guaranteed.
Most of the foreign currency account holders are Bhutanese studying and working in Australia. This is followed by personnel from the armed forces on peacekeeping missions and youth working in the Middle East under the overseas employment scheme.