Bangladesh Bank (BB) is exploring the possibility of opening branches of Bangladeshi banks in the Maldives and introducing alternative currency settlement arrangements to facilitate remittance transfers by expatriate workers through formal channels.
"We are trying to open branches of Bangladeshi banks in the Maldives to ensure that remittances come through formal channels," a senior BB official told BSS.
The official said Bangladesh Bank Governor Md Mostaqur Rahman has already sent a letter to Ahmed Munawar, governor of the Maldives Monetary Authority (MMA), seeking cooperation to facilitate remittance transfers and improve banking services for Bangladeshi migrant workers.
"We are waiting for a reply," the official said.
Bangladesh Bank recently held an online meeting with the Bangladesh mission in the Maldives to discuss the initiative, including the possibility of establishing branches of Bangladeshi banks and strengthening formal channels for sending workers' earnings home.
Some private commercial banks in Bangladesh, including BRAC Bank and National Bank, have conducted feasibility studies on establishing branches in the Maldives, the official said.
Banks from Sri Lanka, Pakistan and India already operate branches in the Maldives, providing a potential reference for Bangladesh's efforts to expand its banking presence in the country.
The proposed expansion of Bangladeshi banks into the Maldives is expected to improve expatriates' access to banking services and make it easier for them to transfer their earnings to Bangladesh through authorised channels.
However, establishing branches would require the necessary regulatory approvals and cooperation between the relevant authorities in both countries.
According to Bangladesh Bank's country-wise remittance data, Bangladesh received around $118 million from the Maldives in fiscal year 2025-26, down from $141.1 million in FY25, representing a year-on-year decline of approximately 16.4 percent.
Bangladesh Bank data also showed that Bangladesh received $38.05 million in remittances from the Maldives during the first three months of the current fiscal year.
The decline in remittance inflows and the difficulties expatriates face in transferring their earnings have prompted the central bank to explore measures to make formal remittance services more accessible, affordable and efficient.
Alongside exploring the establishment of bank branches, Bangladesh Bank has proposed three mechanisms to facilitate remittance transfers from the Maldives.
In a letter dated October 8 to the MMA governor, Bangladesh Bank Governor Md Mostaqur Rahman proposed cooperation between the two monetary authorities to establish safe, efficient, transparent and cost-effective mechanisms for transferring Bangladeshi workers' earnings through formal banking channels.
The first proposal involves exploring the use of the Maldivian rufiyaa through an appropriate arrangement under the Asian Clearing Union (ACU).
Under the proposed mechanism, beneficiaries in Bangladesh would receive the equivalent funds in taka through authorised dealer banks.
The second proposal seeks to allow licensed banks and money transfer operators in the Maldives to make eligible travel-related payments in rufiyaa for Bangladeshi nationals travelling to the country.
In Bangladesh, authorised dealer banks could issue taka-denominated cards, with settlements handled through an agreed regulatory mechanism.
The third proposal involves exploring a bilateral currency swap arrangement between Bangladesh and the Maldives to facilitate the repatriation of Bangladeshi workers' earnings.
Bangladesh Bank has said the proposed mechanisms would be subject to regulatory approval and compliance with the laws of both countries.
The central bank has also expressed its readiness to hold discussions with the MMA through a joint delegation comprising Bangladesh Bank officials and representatives of the Bangladesh mission in the Maldives.
The proposed meeting would focus on regulatory requirements, operational arrangements and settlement mechanisms for implementing the initiatives.
Workers face high remittance costs
More than 100,000 Bangladeshis work in the Maldives, which has a large foreign workforce. According to 2024 data cited in the remittance proposal, the country had more than 200,000 foreign workers, including over 100,000 Bangladeshis.
Despite the large expatriate community, Bangladeshi workers face difficulties in sending money home through formal channels because banks and exchange houses are reluctant to accept the Maldivian local currency directly.
As a result, some workers have to purchase US dollars through the informal or curb market before transferring their earnings through banks or exchange houses.
They also face high commissions on formal transfers, increasing the overall cost of remitting money.
These difficulties can discourage the use of official channels and encourage reliance on hundi and other informal transfer arrangements, limiting the amount of remittances recorded through Bangladesh's formal banking system.
The establishment of Bangladeshi bank branches in the Maldives could help address the problem by providing expatriates with more direct access to banking services, subject to the necessary approvals and operational arrangements.
Combined with the proposed currency settlement mechanisms, the initiative could reduce reliance on informal currency markets, improve transparency and make it easier for workers to send money to their families in Bangladesh.
Bangladesh Bank's efforts to strengthen banking links with the Maldives are aimed at making remittance transfers safer, more efficient and less costly, while encouraging a greater share of expatriates' earnings to enter the country through authorised channels.
The implementation of the proposals will depend on the response of the Maldives Monetary Authority, regulatory approvals and the development of workable arrangements between the two countries, reports UNB.