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Sun 24 Apr 2011 01:12 PM

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Bangladesh launches bank to help overseas workers

Bank will offer low interest rate loans to workers to fund job migration, says officials

Bangladesh launches bank to help overseas workers
Bangladeshi workers queue at the Libyan border. Migrant workers send around $16bn home to Bangladesh each year

Bangladesh has launched a state-run Expatriate Welfare Bank to
fund workers going overseas and to handle their remittances, a major source of
foreign exchange.

About seven million Bangladeshis are employed abroad, most
of them in the Middle East, and they send home about $10bn a year, Finance
Ministry officials said.

Remittances are the second biggest source of foreign
earnings for Bangladesh after garment exports, which are worth about $16bn a
year.

"Workers can borrow funds from the bank at lower
interest rates to meet expenses for going abroad," Prime Minister Sheikh
Hasina said while launching the bank.

"The bank will also help expatriate workers to send
money to their families in Bangladesh at lower handling charges," she
said.

A senior official of the Ministry of Expatriates Welfare and
Overseas Employment said it was hoped the bank would boost remittances.

The bank, with an initial paid up capital of 5 billion taka
($69m), will offer loans to workers at nine percent interest, lower than that
offered by commercial banks.

"Borrowers will have to offer a collateral, but for
those who cannot, there will be a supervisory loan," the ministry official
said.

Bangladesh's state managed and private banks charge more
than 13 percent interest on general loans.

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