Remittance transactions through mobile financial service (MFS) providers are set to get a boost as the Bangladesh Bank has doubled the transfer limit.

As of Tuesday, a beneficiary could receive up to Tk 1.25 lakh in remittance in their MFS account. The amount included the 2.5 percent incentive the government provided on the funds transferred via official channels.

Yesterday, the central bank raised the limit to Tk 2.5 lakh, excluding the incentives.

According to the current rules, an MFS account can hold a balance of Tk 3 lakh at a time.

But if the balance exceeds Tk 3 lakh thanks to remittance transfer, no further cash-in can be made until the balance comes down to Tk 3 lakh, said the BB in a notice.

There are 21.50 crore MFS users in Bangladesh, data from the central bank showed.

"Bangladesh Bank's decision to raise the transfer limit for inward remittances deposited in the MFS accounts of beneficiaries is a timely move," said Muhammad Zahidul Islam, head of media and communication at Nagad Ltd.

"This will boost the remittance inflows through formal channels and shore up our foreign currency reserves."

Remitters transferred Tk 520.39 crore through MFS providers in September, up more than 57 percent from Tk 330.11 crore in the same month a year ago.

Migrant workers sent home $1.93 billion in November, an increase of 21 percent year-on-year, as banks offer a higher rate for the US dollar to collect remittance. The receipts, however, were 2.42 percent down from a month ago.

The government provides 2.5 percent incentive on remittance transfers while another 2.5 percent comes from banks.

Some banks are offering at least Tk 5 to Tk 6 per dollar more than the permitted exchange rate fixed by the Bangladesh Foreign Exchange Dealers Association and the Association of Bankers Bangladesh.

According to the Bureau of Manpower, Employment, and Training (BMET), more than 1.49 crore Bangladeshi workers are employed abroad. The Bangladesh Bureau of Statistics, however, put the figure at 50.53 lakh.

BMET's data only includes those who went abroad for work but not those who have returned, an official explained last week.