Foreign Remittance Conceptual Framework

Remittance means the some of money that is sent to subject for a particular purpose. Citizen usually perceives foreign remittance as foreign money. But the term foreign remittance is used in a broader sense. Normally it can simply be defined as a process of conversion of one currency to another. There are also more formal definitions, chiefly from British writers, one of them, a well known author of some popular books on foreign exchange where as definition of remittance the Dr. Paul Einzig, tells us that foreign Remittance operation is a system or process of conversion of one currency to another. The Foreign exchange regulation Act, refer that foreign exchange means foreign currency and includes any instrument drawn accepted, made or accepted, made or issued under clause (13) of article 16 of the Bangladesh Bank order , 1972 all deposit, Credits and balances payable in any foreign currency and any draft, travelers cheque, letter of credit and bill of exchange expressed or drawn in Bangladesh currency but payable in any foreign currency.    

In a world, which is metaphorically speaking, getting smaller everyday, foreign exchange too is becoming a part of everyday life. As the interdependence of the international community for goods and services grows, so does the reach of foreign exchange into the homes of every citizen, or nearly every citizen. An old poor women who don’t have any income who depend on the money of his son who send money from a long distance like Saudi Arab is becoming possible due to remittance operation of Bank. The wage earner money, fund transfer for corporate business operation, investment by foreign nationals, family remittance facility, remittance of leave salaries of foreign nationals, and remittance issuance for travel abroad, letter of credit, bill of lending and etc –all the operation adhered with remittance. So in everyday life remittance is earnest issue in everyday life.

Foreign exchange like foreign trade is a part of economic science. It deals with the means and methods by which rights to wealth in one country’s currency are converted into those of another country. By the same token, it converts the methods used for conversion, the forms in which such conversions take place and the causes that render this conversion necessary. The causes that make dealing in foreign exchange necessary are too obvious. Since the early days of cultivation, nations of the world are engaged in the business of trading with each other. At the same time each nation have developed a currency, of its own, perhaps a measure of satisfying nationalistic ego or display of sovereign existence. These two divergent phenomena or what the French economist Perou described as internationalism of trade nationalism of currencies, are precisely the reason which gives rise to dealing in foreign exchange. One can visualize that when there is emerging of one single world currency on some future date, dealings in foreign exchange will cease to exist, at least in the form, as we know them today. Until then international trade and movement of money and capital will continue to remain the mainspring of foreign exchange dealing.