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Call to stop illegal remittances from UAE

ABU DHABI // Authorities have launched awareness campaign against the unofficial remittance of money, which can lead to exploitation, fraud and security risks.

New figures show that more than a fifth of money remitted, for example, to Bangladesh from the UAE, is moved through these illegal means.

According to the Bangladesh Bureau of Statistics, in the 2015-2016 financial year, the 700,000 Bangladeshis in the UAE sent Dh9.9 billion to their home country.

The bureau found 22 per cent of these funds was being sent through the hawala or hundi system — illegal brokers or middlemen who transfer the money outside of the banking system.

Promoth Manghat, chief executive of the UAE Exchange Group, said many were ignoring the official money transfer companies because either the illegal methods were cheaper or the workers did not have bank accounts or documentation.

Mazeed Rehman, 26, who works as a cook in a private household, has been sending money to his family in Bangladesh through a middleman for the last four years.

“I belong to a remote village where there is no bank and post office nearby,” he said.

“It takes almost a day to reach the nearest post office and a bank branch. My wife and my parents are literate enough to understand banking process. There is lots of paper work.

“Hence, sending money through a middleman is the suitable option for me. Money reaches at the door step of my house without any hassle.”

He said he would prefer to send the money legally but the money exchanges and banks were too expensive.

“If I send money via a bank, it does not immediately arrive in the account. It takes two to three days for the process. While through hawala, the money reaches my doorstep within a few minutes.

“Also, banks charge big amounts and the conversion rates are higher. For a poor man like me, every penny counts.”

He said he was aware of the risks involved in using illegal methods.

“Hawala is risky because we have to trust an unknown middleman to send our money. Some of my friends have lost money because the middleman ran away and they couldn’t complain because it was illegal.

“Banks are always safer but because of the higher rates and complicated procedures, people, especially those who have no support system back home, have no other option than to opt for illegal channels.”

Akbar Khan, 45, a Pakistani driver in Dubai, said he uses hawala because it only costs Dh10 to send money, compared to Dh25 in money exchanges.

“It’s all about economics and what is cheaper on your pocket,” he said.

“Also, it only takes only few hours to Hawala guy to drop money at my doorstep in Pakistan and bank will take at least three working days to transfer the money.”

The UAE Exchange has began a partnership with Bangladesh’s ministry of expatriates’ welfare and overseas employment and the Bangladesh embassy to encourage expatriates to choose legal channels to send remittances.

The Amar Bangladesh campaign will distribute 500,000 pamphlets in labour camps and community centres advocating the advantages of transferring money legally.

“We will also use social media and TV channels to spread the message,” said Mr Manghat.

Muhammad Imran, the Bangladeshi ambassador, said that expatriates who are sending money through illegal means are not helping their country. On the other hand, foreign currency sent through conventional means adds to its foreign reserves.

“Foreign currencies received through legal channels are used by the government for various programmes in the fields of health and education to benefit the poor people and also to develop physical infrastructure of the country,” he said.

According to Bangladesh Bank, remittances coming from expatriates in Gulf countries have dropped in recent months. A total of US $548 million (Dh2.01 billion) was remitted in November as compared to $591 million (Dh2.19 billion) in October.

Remittances contributed 13 per cent of Bangladesh’s gross national product in 2015.

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The National