Kathmandu, January 16:

Contrary to popular belief that tourism, carpet or the readymade garments sector is the largest foreign currency earner, it is remittance that is the largest foreign currency earner.

“Remittance contributes to 50 per cent of the total foreign currency earnings,” said Ramji Regmi, executive director of Nepal Rastra Bank (NRB) speaking during Sunrise Bank Ltd’s new product ‘Suryodaya Remit’ launch programme.

“The contribution of exports stands at a mere 22 per cent,” he said adding that in recent years remittance has become the lifeline of Nepal’s economy. “Though it’s not good for the health of the country’s economy in the long run.”

“In South Asia, Nepal is the only country where remittance is invested in unproductive sectors like buying house and land,” Regmi added. He was of the view that the central bank has facilitated the remitters.

However, manpower agencies complain that the government does not recognise their contribution in bringing remittance that has kept the country’s economy afloat.

L P Sanwa Limbu, immediate past president of Nepal Foreign Employment Agencies’ Association, said the country needs to recognise their contribution.

However, of the total remittance - except for that from India - only 60 per cent comes through banking channels. The rest 40 per cent still comes through non-banking channels despite the fact that there are 39 remmittance agencies.

“To channelise remittance through banking channel,s Suryodaya Remit will be helpful apart from that that a customer can avail of various facilities and benefits with Suryodaya

Remit,” said chief executive officer of Sunrise Bank Kishore Maharjan.

The bank has assigned KRS Solutions — with 250 outlets across the country — as its authorised agent.

“The global financial crisis has yet not hit the remittance business in Nepal,” Maharjan said adding that the increase in flow of people going abroad also had not yet gone down drastically. Remittance will decrease only if there is a mass return of Nepali migrant workers due to global financial crisis in countries where they are working at present. “Till yet, the situation is not so serious,” he added.

Remittance increased by 16 per cent during the fiscal year 2006-07 whereas it increased by 25 per cent in the fiscal year 2007-08. In the first five months of the fiscal year 2008-09, it has posted an increase of 69 per cent in comparison to the same period in the last fiscal year.

Sunrise Bank started channelling money from Malaysia from today and within a week, it will start channelling from the Gulf and other countries. Till January 13, the bank was able to generate a total deposit of Rs 8.64 million and a total loan amount of Rs 8.78 billion. The bank has plans to open branches at Pharping and Chahabhil within the valley and also at Birgunj outside the valley.