This document discusses the importance of harmonizing regulations for international remittances. It notes that Bangladesh relies heavily on remittances from expatriate workers to fuel economic development. While banks provide remittance services, their fees are not reasonable for low-wage workers. Exchange houses and money transfer organizations (MTOs) fill this gap by providing more affordable services, though they rely on banks for settlements. To further facilitate cross-border remittances, regulatory frameworks need coordinated harmonization across countries regarding the transaction nature, services allowed, and reporting systems for exchange houses and MTOs. While harmonizing regulations globally poses challenges, setting up an international coordinating body could help overcome them.

1. Importance and challenges of harmonizing regulations at international,
regionaland country level to ensure a consistent approach to international
remittances
1. Bangladesh is a country of surplus population (160 million). To
implement development work and conduct regular activities, we don’t
need to import manpower. However, we allow technically expert
expatriates to work in our country under work permit issued by the
competent authorities. Expatriates working in Bangladesh are allowed to
maintain bank accounts locally. The Fx regulations allow expatriates to
repatriate their current income upto 75% to their home country. They are
also allowed to repatriate personal savings while leaving the country after
expiry of work permit/employment contract. The transactions are
conducted through their bank accounts.
2. Banking services for wage remittances are not cost effective for low wage
earning workers. In this case, Exchange Houses/MTOs are providing
remittance services to expatriate workers in developed countries at
reasonable cost. Exchange Houses/MTOs are working as substitutes to
banking services. The economy of remittance receiving countries like
ours is very much dependent on wage remittance to meet external liability
for patronizing our development works. Therefore, services of Exchange
Houses/MTOs are very important for us until alternative window is
found.
3. The cost of service provided by banks is not reasonable for wage
remitters. So, services of Exchange Houses/MTOs has become widely
accepted, though their dependence is on banks for final settlements. To

2. further facilitate cross border remittances, regulatory frameworks at cross
countries needs coordinated harmonization. They may be :
o Transaction nature of exchange houses/MTOs in different countries
needs to be identical;
o Only wage remittance services should be allowed to exchange
houses/MTOs, no business remittance should be allowed;
o If business service is allowed, demarcation line needs to be established;
Uniform reporting system should be introduced for their transactions to
supervise by regulators/licensing authorities.
4. Harmonizing regulations at international, regional and country level may
be a challenge to implement. But such challenges can be overcome easily
provided that one international body is set to work as a catalyst to
coordinate among regulators of cross countries.