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Agreement with the Western Union; Postal dept hoping benefit PDF Print E-mail
Tuesday, 29 January 2008

Staff Correspondent

The postal department has signed an agreement with the Western Union to deliver money transferred by the global money transferring company as part of a reform programme to make the financially ailing department break even by the end of 2009.

The American company, which does business in more than 200 countries across world, will announce the deal on Monday at a programme in a city hotel. ‘The alliance will help to make the postal department financially viable,’ said Mobasherur Rahman, director-general of the postal department, on Sunday.

Under the deal, some 450 post-offices across the country will start delivering money transferred by the Western Union from April, and 1,000 post-offices within a year,’ he said. Mobasherur hoped that it would make money transfer easier for millions of Bangladeshis living and working abroad and draw them away from using the ‘hundi system’ to send home their earnings through informal channels as money would reach the recipients within 15 minutes of remitting it from abroad.

He said that the postal department would get 25 per cent of the tariff for every transfer of money. ‘In the first year we expect to earn revenue worth at least Tk 5 crore as commission from the Western Union,’ he added. More than five million Bangladeshis now work abroad and last year they remitted $6.56 billion, but officials said a significant amount was sent home through informal channels.

Western Union’s officials in Dhaka said the new deal would help the money transferring company to extend its operations to the countryside where the banks do not have branches and post-offices are the usual money transfer channels. Bangladesh has over 10,000 post-offices covering almost every part of the country and employing around 40,000 workers.

The American company, which covers more than 200 countries across the globe, has been pursuing the deal with the postal department for around four years after it signed similar deals with India, Pakistan and China to increase its presence in Asia. In Bangladesh, however, the company’s expansion was slow because it only transfers the money through some local private banks. The postal department’s chief said the deal with Western Union is part of the reforms to make the department profitable. ‘Apart from money transferring, we are planning to offer several products, and if these products are launched in time the postal department will stop making a loss by the end of 2009,’ he said.

The department, heavily subsidised by the government, last year incurred a loss of around Tk 130 crore as it was losing market to private courier services and companies operating by mobile phones. The department has already increased various postal tariffs by 5 to 50 per cent, the first time in over 17 years, to cut its losses. But officials said it would bring about additional revenue of only Tk 25 crore

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