The Climate Change Trust Fund (CCTF) authority has abused their entrusted power in collusion with each other, taking advantage of the loopholes in the Climate Change Trust Act 2010, climate activists alleged.
They demanded reconstitution of the trustee board by incorporating independent and non-partisan members, especially professionals having expertise in fund management and financial risk analysis.
Transparency International Bangladesh (TIB), which was working on climate change related issues, had first expressed their concern over the problem that surfaced few months ago.
TIB made it clear that Farmers Bank Limited (FBL) refused to pay back the fixed deposit worth over Tk 5.08 billion of CCTF due to liquidity crisis.
Talking to the FE, TIB executive director Iftekharuzzaman said the CCTF authority violated its own policy decision as well as the minimum standard of good practices in fund management. High rates cannot be the only criteria for investment of public money.
"Credibility and track record of an institution are equally important, if not more important, which the FBL never had. The matter deserves serious consideration by the government to bring to justice of those who are responsible for the crisis created with the trust fund," he said.
He said that recovering the money would not be enough, but the people who abused the entrusted power must be brought to book to prevent recurrence of such situation in future.
At the 8th board meeting of the CCTF in 2011, it was decided that the FDR should be deposited only after collection of offer letters and analysing the CAMEL rating of different banks.
The CCTF trustee board chairman was responsible for resolving and approving the FDR-related issues.
It was also decided that all the activities related to depositing its fund must be informed to the board. The chairman and minister approved the decision to deposit the fund.
The government has allocated Tk 32 billion from its revenue budget since formation of the CCTF until 2017-18.
As per the law, 66 per cent of the total CCTF fund should be allocated for project implementation and 34 per cent be kept as fixed deposit - of which, 75 per cent should be kept in the public banks and 25 per cent in the private banks.
The total amount of fixed deposit is over Tk 11.91 billion and interest over Tk 6.46 billion, total over Tk 18.38 billion.
At present, over Tk 13.21 billion has been kept as fixed deposit in four public banks and over Tk 5.16 billion in private commercial banks. The fund has earned over Tk 8.78 billion in interest, which the trustee board has allocated in favour of various projects.
Besides, Tk 2.32 billion has been transferred as short term deposit (STD) for allocating in favour of various projects and programmes.
The CCTF kept a fixed deposit of over Tk 1.58 billion in the corporate branch of Janata Bank, Tk 3.18 billion in Banani corporate branch of Bangladesh Krishi Bank, Tk 3.81 billion in the local office of Rupali Bank, Tk 4.09 billion in the principal branch of Bangladesh Development Bank (BDBL), and Tk 540 million in Karwanbazar branch of BDBL.
It deposited Tk 622 million in 2017 and 2018 with Gulshan branch of the FBL. A decision has been taken to renew the FDR for another three months.
It also deposited TK 3.84 billion with Motijheel branch of FBL, for which letters for encashment were sent.
It also deposited Tk 528 million with the bank's Gulshan South Avenue branch, for which letter for encashment was sent. But the branch requested for renewing the FDR by another three months, which is under consideration.
The CCTF deposited Tk 85 million with AB Bank Ltd's principal branch at Dilkusha.
When his comment was sought regarding the irregularities, the then chairman of the CCTF trustee board and Environment Minister Anwar Hossain said that no illegitimate act did take place in depositing the fund as the central bank had given sovereign guarantee.
He also claimed that the secretary too supported the decision.
But a trustee board source said the minister even skipped the agenda of recovering the fund from the FBL in the board meeting last year, saying the board would prepare a guideline after necessary scrutiny.
Mr Iftekharuzzaman said that this episode reaffirms our perennial concern that the board of the CCTF should be thoroughly reconstituted to incorporate independent non-partisan members and especially professionals having expertise in fund management and financial risk analysis, and free from political bias and conflict of interest.
Network on Climate Change Bangladesh (NCCB) Trust has been fighting along with 22 other NGOs for ensuring transparency and accountability of the CCTF and climate justice.
NCCB Trust coordinator Mizanur Rahman Bijoy thought the problem lies with the act itself as it entrusted immense power to the trust chairman. The minister is the chairman and his secretary is the member secretary of the trustee board. The decision of the minister is unofficially final, he added.
He said it was clearly a political decision to select the FBL by the minister by avoiding the board's decision. This seriously calls for amendment to the law, which has empowered the minister with absolute authority, he added.
At present, 10 ministers, five secretaries and two government-nominated civil society members are in the trustee board, which is not healthy to take any fair decision, said Mr Bijoy.
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