Central Bank of Sri Lanka (CBSL) Governor Ajith Nivard Cabraal, Bank Negara Malaysia (BNM) Deputy Governor Dato’ Muhammad Bin Ibrahim and Republic of Korea Financial Services Bureau Director-General Byung Rhae Lee comprised the “Creating and Enabling Remittance markets: Experiences and Lessons — Policy and Regulatory Reforms” discussion panel during the International Fund for Agricultural Development (IFAD) and the World Bank’s Global Forum on Remittances (GFR) 2013 on 20 May 2013 in Bangkok, Thailand.

AFI Executive Director Alfred Hannig moderated the panel, which was held during the “Enabling Remittance Markets: Standard, Regulatory Reforms, and Best Practices” plenary session.

The panel highlighted the importance of harnessing technological innovations to bring down the cost of remittances. Mr. Cabraal offered that this goal could be achieved by strengthening the e-payments infrastructure, including mobile banking channels, or through the exploration of opportunities to pool remittances to countries with significant flows and transfer funds in bulk.

Mr. Ibrahim provided an overview of the regulatory shifts since 2005 that enabled non-banks to offer remittance services in an effort to bring down costs, as well as ensure the quality of services are high for both the senders and recipients of remittances.

The group later discussed the importance to solidify bilateral agreements and define the role of banks in providing cross-border remittances. Mr. Lee cited the bilateral agreement formed between Shinhan Bank in Korea and Khan Bank in Mongolia that prompted similar partnerships.

Mr. Cabraal also pointed out that bilateral agreements between nations are not only beneficial for reducing costs but also removing obstacles to transfer remittances such as various constraints connected to stringent KYC requirements and Anti-Money Laundering laws. Mr. Ibrahim concurred and mentioned the importance of ensuring remittance products and services are checked for AML-CFT compliance as a safeguard to the financial integrity of the country, too.

Panelists later reached a unanimous consensus on the idea that because remittances contribute to capital building and poverty alleviation, there is a need to ensure senders and recipients experience the long-term benefits of remaining in the financial system. Mr. Cabraal advocated for the creation of special long-term financial instruments to enable migrant workers to maintain a continued relationship with their respective financial institutions by offering services to help manage income and funds.

“The perception in the world must change, this is a process that will increase in time goes on,” said Mr. Cabraal. “Remittances overall are a very important tool in the fight against poverty.”