Access to formal banking systems would enable Rohingya refugees in Bangladesh to receive remittances through legal channels. This would bring benefits for the refugees, the humanitarian response, and Bangladesh’s economy and security.

The Rohingya refugee crisis in Bangladesh, marked by reduced humanitarian funding and financial access barriers, forces refugees into precarious informal financing methods. Faced with statelessness, poverty and dwindling aid, Rohingya refugees increasingly rely on remittances from the Rohingya diaspora, mainly in Malaysia, Saudi Arabia and other Middle Eastern countries. In 2020, nearly 39% of Rohingya families in Bangladesh had a relative in a third country and 21% of households had received a remittance in the previous year.[i] However, both the recipients and those sending the funds encounter obstacles in sending money through formal channels, so they are forced to resort to informal routes involving multiple intermediaries, delays and inefficiencies.

To explore the dynamics of remittances received by Rohingya refugees in Bangladesh, the Centre for Peace and Justice (CPJ) co-produced qualitative research with Rohingya refugee volunteers and tapped into CPJ’s informal trust network across eight different camps in the Ukhiya and Teknaf subdistricts of Cox’s Bazar.[ii] CPJ’s community-based researchers organised several consultations with the members of the trust network and six in-depth interviews with diverse stakeholders. They discussed the structural barriers Rohingya refugees face accessing formal financial systems, the risks and inefficiencies of using informal channels for remittances, and the impacts of the remittances on the recipients, the host country and the economy.

Current remittance practices and challenges

Currently, Rohingya refugees primarily use informal channels for financial transactions. These include bKash, a popular mobile financial service; Hundi, an oral or paper-based agreement to pay a stated amount; and Hawala, a traditional and informal money transfer system based on trust and a network of brokers. Refugees in Bangladesh are excluded from more formal money transfer services like Western Union.

Using bKash involves seeking assistance from trusted individuals such as hosts, NGO staff, or long-settled refugees who arrived in 1992 and before. According to one interviewee:

“Individuals can visit a nearby bKash agent, provide their mobile number and transaction details, and receive money instantly in their mobile wallet. Sending money to Myanmar adds an extra delivery charge of 30 to 50 Bangladeshi Taka (BDT) per BDT 1,000 (equivalent to USD 0.25 to 0.42 per USD 8.37).” Such transactions are risky, as government detection could lead to severe repercussions. Rohingya refugees face fines and harassment if found with Bkash accounts by the police. A respondent shared his experience:

“One day, I was going to another camp. The police checked my phone and they found bKash apps, where I received 20,000 Taka as remittance. The police took away both my phone and the money.”

The Hawala system is a traditional and informal money transfer system based on trust and a network of brokers. As described by an interviewee from the Rohingya camp, this system operates without physical money transfer across borders, it involves a fee and relies on trust and honesty among brokers. The lack of formal oversight means that disputes rarely find fair resolution and financial fraud can occur without recourse to justice. The commission rates for transactions for Rohingya refugees in Cox’s Bazar have surged, significantly increasing the cost of sending money. While reliance on familiar persons may reduce fees, unknown intermediaries often demand high commissions.

This informal economy not only limits the financial security of Rohingya refugees but also deprives the host country (of the sender and the recipient) of revenue, as these transactions bypass formal economic channels. Despite these challenges, amid cuts to humanitarian aid, remittances remain crucial for Rohingya refugees in Bangladesh who use them for their basic needs such as food, clothing and medical expenses.

Why Rohingya people are blocked from the financial system in Bangladesh

Structural barriers
Rohingya refugees in Bangladesh are classified as Forcibly Displaced Myanmar Nationals. In this classification, they are neither officially recognised as refugees nor considered eligible for any government-issued documents (such as national identity cards, birth certificates, land deeds or passports) that would permit them to access the financial system.

Ad-hoc policy and poor political will
The Bangladeshi government’s policy towards the Rohingya people has been short-term and ad-hoc in nature and focuses on the repatriation of nearly one million refugees to Myanmar. Enabling access to work and to the financial system in Bangladesh does not fit within this agenda.

The temporary policy approach guides camp governance and the NGOs’ regulatory framework. The Bangladeshi government does not approve NGO projects which are longer than one year. Yet, the civil war in Myanmar continues and Rohingya people, and other ethnic groups, continue fleeing their homes. It is now more than seven years since the 2017 influx of more than 740,000 Rohingya refugees arrived in Bangladesh and 30 years since some of the earlier displacements of Rohingya people.

Fear of social integration and community resistance
There is apprehension among policymakers that the financial integration of refugees might impact the local job market and economy, potentially leading to higher competition. They are concerned that allowing Rohingya people to access the financial system would also lead to their social and cultural integration in Bangladesh and that the Rohingya people will never return to Myanmar. Bangladesh’s previous government (from August 2017 to August 2024) was aware of emerging resistance to public policies regarding Rohingya integration into the local community, in response they imposed movement restrictions beyond the camps and constructed a spiked fence.

Another concern, cited by some Bangladeshi media outlets, is that Bangladesh is an overpopulated country and not capable of hosting an additional one million Rohingya refugees. Hence the government is reluctant to create any opportunities for the Rohingya which might encourage them to stay for good or encourage those remaining in Myanmar to migrate to Bangladesh.

Othering and anti-Rohingya narratives
Our study shows that the initially sympathetic attitudes of host communities towards Rohingya refugees have started to decline. There’s a widening trust deficit between local Bangladeshis and Rohingya people, leading to further dissatisfaction and tension among government policymakers.

A CPJ study from early 2019 reflects the growth of anti-Rohingya sentiments, which can be linked to emerging instability in the Bangladesh-Myanmar borderlands and an increase in crimes in refugee camps. Local Bangladeshi’s emerging concerns around issues such as drug dealing and a food crisis came up in different studies.[iii] Also, some label the Rohingya as foreigners who don’t belong to Bangladesh. Such narratives adversely influence policy dynamics against Rohingya people and the question of their access to the financial system. Some local people see the Rohingya people as a threat (“destroying the Bangladesh economy” or “harming Bangladesh”) and advocate for sending them back to Myanmar.

Security concerns  
The Bangladeshi government is reluctant to open any civic services for Rohingya people, particularly financial access, due to concerns over national security, fraud and money laundering. The perception is that criminals and armed groups on the border might benefit and that this would encourage drug smuggling and illegal trade in arms and other goods, leading to an escalation in regional insecurity. This fear has intensified recently as the Arakan Army (AA) and Rohingya Solidarity Organizations (RSO) in Myanmar are engaged in civil war with the military government forces, leading to increased isolation of the borderlands. These armed groups often depend on communities at the border for supplies and arms deals.

The benefits of enabling Rohingya people to access Bangladesh’s financial systems

For the Rohingya refugees
The ability to access the banking system would give Rohingya people in Bangladesh the potential for greater financial stability. It would be easier and less costly for them to receive remittances, which could reduce their total reliance on aid.

For governance
Currently, refugees rely on informal channels for money transfers which are risky, costly and may directly or indirectly support illegal activities such as cross-border smuggling, since the authorities cannot track these transactions. Legalising their financial transactions would provide better data for monitoring, which could help prevent money laundering and cross-border crimes.

For the Bangladeshi economy
Formal remittance channels would lead to a significant increase in financial inflows, which could boost the overall economy of Bangladesh. The recent shortage of US dollars in Bangladesh’s national reserve system led to challenges in importing essential items such as food and fuel. The Rohingya diaspora’s remittances would contribute to boosting Bangladesh’s revenue.

Opening up opportunities and reducing illegal activities
Restricting Rohingya refugees’ access to financial services in Bangladesh exacerbates their marginalisation and vulnerabilities. Informal systems of money transfer like Hawala, Hundi and mobile-phone-based banking platforms such as bKash are inefficient and present legal complexities. Formalising remittance access could reduce the dependency on humanitarian aid, which is insufficient and at risk of being cut further. The remittances could also enable the refugees to invest in small-scale economic activities, leading to improvements in their well-being. Having regulated remittance flows could reduce illegal activities caused by economic desperation, and bring economic and security benefits for Bangladesh as a result of increased monitoring and transparency.

 

Mohammad Azizul Hoque
Faculty and Advisor, Refugee Studies Unit, Centre for Peace and Justice, Brac University, Bangladesh
azizul.hoque@bracu.ac.bd 
linkedin.com/in/azizul-hoque-358039b2/

Tasnuva Ahmad
Senior Research Associate, Centre for Peace and Justice, Brac University, Bangladesh
tasnuva.ahmad@bracu.ac.bd 
linkedin.com/in/tasnuva-ahmad-04a78359/

Mohammed Taher
CPJ’s Rohingya Refugee Research volunteer, Cox’s Bazar Refugee camps, Bangladesh
muhammadtahair351935352@gmail.com

 

[i] Asia Foundation (2020) Navigating at the margins: Family, mobility and livelihoods amongst Rohingya refugees in Bangladesh bit.ly/rohingya-family-mobility-livelihoods

[ii] See Hoque M A, Ahmad T and Prova T K (2023) ‘Community-Based Research in Fragile Contexts: Reflections From Rohingya Refugee Camps in Cox’s Bazar, Bangladesh’, Journal on Migration and Human Security, vol 11: 1 bit.ly/rohingya-refugee-camps-coxsbazar

[iii] See Ansar A and Khaled A F M (2021) ‘From solidarity to resistance: host communities’ evolving response to the Rohingya refugees in Bangladesh’, Journal of International Humanitarian Action, vol 6 bit.ly/host-communities-Bangladesh

 

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