Kathmandu, February 7 A study committee of the government has suggested that the government should take necessary steps to reduce remittance service charge in a bid to encourage Nepali migrant workers to choose formal channels (through banks and financial institutions) to send their earnings to the country.
The committee led by Secretary at the Ministry of Labour, Employment and Social Security Mahesh Prasad Dahal has submitted its report to labour minister Gokarna Bista concluding that higher charges that migrant workers are being levied while sending their earnings to Nepal is one of the major reasons behind the increasing flow of such money via informal channels like hundi.
“Migrant workers find informal channels more convenient to send their earnings back home as the levied charges are comparatively low and their earnings are directly delivered at the homes of their families. Similarly, workers get higher exchange rates while sending money through informal channels,” states the report, adding that the government should reduce the remittance charge and make it hassle free in a bid to encourage workers to send money via formal channels. The report adds that migrant workers are charged 4.5 per cent on an average while sending $200 and three per cent on an average while sending $500 to Nepal from major labour destinations. “However, sending money through informal channels is cheaper than this,” claims the report.
Stating that even the Sustainable Development Goals of the United Nations has targeted bringing down remittance service charges, the report adds that Nepal should seek possible measures to bring down the charges which in return will not only encourage remittance through formal channels, but will also help in growth of the country’s economy.
As Nepal is a remittance dependent economy, the report suggests that the government should introduce attractive incentives and rewards for top remittance companies.
The committee has also suggested that the government should form a high-level permanent mechanism to deal with the remittance issue, especially proper management of remittance inflow into the country.