The government has asked the central bank to set a 'roadmap' towards recovering around Tk8.74 billion of its climate fund, including principal amount and interest, stuck in crisis-ridden private bank Padma Bank, sources said.
To this effect, the finance ministry issued an instruction on October 15 to take next course of action regarding the matter by the Bangladesh Bank (BB).
It also instructed the central bank to include high-level representatives from the finance division, financial institutions division (FID), environment, forest and climate change ministry and Padma Bank (formerly known as Farmers Bank).
Contacted, a central banker said "We have received an instruction sent by the finance division recently. We are now working on the issue."
The instruction was given following an Advisory Council meeting, which held on September 12 last.
Earlier, the Bangladesh Climate Change Trust under the Ministry of Environment, Forest and Climate Change opened fixed deposit receipts (FDRs) with Padma Bank.
No interest has been paid on the Trust for around six years last, a high official said.
According to a Padma Bank source, the FDRs worth Tk5.08 billion were opened in 2015 at different branches including Motijheel, Gulshan, and Gulshan South Avenue with the then Farmers Bank for one year period.
The authority of the FDRs was renewed until 2018 due to non-payment of interest. Then the bank provided only Tk 800 million in phases.
But the fund authority did not receive any further funds since then, he added.
"Officials concerned of the fund have frequently communicated with the bank officials and sent formal letters, seeking refund of the climate funds, but the bank did not listen to our request. Currently, Padma Bank owes to the trust funds that stand at aroundTk8.73 billion with interest volume," he said.
Due to a huge liquidity crisis, a significant portion of deposit fund remains stuck in the crisis-stricken commercial bank, he added.
When contacted, Managing Director of Bangladesh Climate Change Trust Md Rafiqul Islam said, "We have constantly met with the bank officials, requesting a refund of the funds. But, the bank authority always says they will pay it soon, but they are not providing."
He said, "The financial health of the bank is not good. But we hope to get way out for refunding the fund as a move is underway now to create a road map regarding the issue."
When contacted, an official of the finance division said the division had sent a letter to the central bank asking for setting a road map to recover trust funds which remained stuck in Padma Bank.
Currently, substantial deposits of different state agencies remain stuck in the crisis-stricken bank. But, the bank cannot refund the entities after requesting refund.
The agencies are: the Chittagong Port Authority, Bangladesh Jiban Bima Corporation and Titus Gas Transmission and Distribution Company.
According to a BB inspection report, around Tk35 billion was embezzled from the bank, which was converted as default loan.
More than two years after establishment of the bank, the then Farmers Bank's several former board directors including its the then chairman Muhiuddin Khan Alamgir and audit committee chairman Md Mahbubul Haque Chisti were found involved in financial irregularities, the report mentioned.
[email protected]
