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KUALA LUMPUR (May 8): The average cost of transactions made through non-bank money transfer service providers in Malaysia was lowered to 2.96% last year ahead of United Nations expectations ( UN), the central bank announced today.
This is compared to the cost of remittances of 12% in 2016, which showed that for every RM100 sent, RM12 will be pocketed by the remittance companies.
” We do not have any [lower] target in itself because we think 3% is very reasonable, but what we want to do is reduce it further through the use of technology, âsaid Nik Mohamed Din Nik, director of the trade regulation department of Bank Negara Malaysia (BNM). Moussa.
He was speaking to reporters on the sidelines of the three-day Global Forum on Remittances, Investment and Development 2018 here today.
Nik Mohamed was referring to Goal 10 (C) of the UN Sustainable Development Goals (SDGs), which aims to reduce the transaction costs of migrant remittances to less than 3% by 2030 – a decision hailed as a substantial increase in disposable income for families receiving remittances. .
Technology has played a huge role in lowering costs, he said, as price transparency on websites and mobile apps allows user comparison and therefore healthy competition within the industry.
Based on BNM statistics, in 2017, Malaysia sent a total of Ringgit 33 billion abroad, mainly to Indonesia, Bangladesh and Nepal, up from Ringgit 34.2 billion the previous year. . This placed the country fourth in the world in terms of country of origin, reveals the results of RemitScope.
The central bank expects overseas remittances to increase this year, albeit at a low figure given the high base.
“We expect it to increase, in part because we are redoubling our efforts, using technology and awareness, to [encourage migrants] who use the illegal channels, to use the formal channels, so we expect growth in the region.
âIn addition, we are also targeting small and medium-sized businesses, so that they also have the option of using money transfer service providers to send their money to the countries they do international business with,â Nik said. Mohamed.
Malaysia is currently home to a total of 1.8 million migrants, Nik Mohamed said, citing data from the Interior Ministry.
Addressing misconceptions that outgoing remittances only benefit host countries, Nik Mohamed said the Malaysian government can âdirectly benefitâ from remittances made through formal channels because users 6% Goods and Services Tax (GST) is charged, while suppliers will also be subject to corporation tax.
He added that with the growing adoption of financial technology (fintech) products, remittances are bringing positive spinoffs to the FinTech industry, creating additional income, jobs and office rental in the world. country.
Of the 344 money service operators in the country, 34 are money transfer service providers. Of that number, half or 17 currently provide mobile or web-based money transfer (e-remittance) services, up from four in 2012.
Earlier in her speech today, BNM Deputy Governor Jessica Chew pointed out that the most dynamic growth in remittances over the past decade has occurred in Asia, which receives 55% of all flows, highlighting the profound impact of remittances on development.
She said that while clarifying regulatory standards is important, data on remittances is needed and policy lifecycles will need to be managed more proactively to allow for policy renewal when conditions change.
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