The government has asked for a roadmap to recover Tk 874 crore of climate change trust fund stuck with Padma Bank. In this context, Finance Department, Financial Institutions Department; Bangladesh Bank organized a meeting with high level representatives of Ministry of Environment, Forest and Climate Change and Padma Bank. The meeting will be held tomorrow Thursday at the central bank's head office.
According to sources from the Ministry of Finance and Bangladesh Bank, the action plan will also be determined in the meeting regarding the recovery of funds of other government institutions stuck in Padma Bank. In 2015, Tk 508 crore was kept as fixed deposit from the Bangladesh Climate Change Trust Fund under the Ministry of Environment, Forest and Climate Change for a period of one year in Gulshan, Motijheel and Gulshan South Avenue branches of the then Farmers Bank (now Padma Bank).
It was renewed till 2018 due to non-payment of interest at the end of the term. Till that time, Padma Bank has returned only 80 crore rupees in several rounds. Until the financial year 2018-19, the interest-actually withheld money stands at 597 crore 62 lakh taka. The bank authorities refused to withdraw the trust money at various times after the expiry of the deposit period. As of February this year, the company's debt to the bank, including interest and principal, stands at 873 crores and 82 lakhs.
Three years after its inception in 2013, Padma Bank faced a liquidity crisis due to significant irregularities.
Yet government agencies such as the Bangladesh Climate Change Trust Fund invested significant sums in Padma Bank with the lure of high interest rates and political interference.
The chief advisor of the interim government to recover the money. It was presented at the advisory council meeting held on September 12 under the chairmanship of Muhammad Yunus. In the meeting, it was decided to make a well-defined roadmap on priority basis after discussion with the representatives of all parties including Bangladesh Bank, prioritizing the monetization of this money. The central bank has started working to implement this decision.
An official of the Ministry of Finance said that although there have been irregularities and corruption in the country's financial sector at various times, there has never been a discussion in the cabinet or the advisory council meeting about getting back the money deposited by government institutions from any bank.
Managing Director of Bangladesh Climate Change Trust Rafiqul Islam told Samakal that from 2018 to 2019, the trust authorities repeatedly met with the bank's officials and sent letters, but the money was not returned. But the bank did not give any amount towards interest or principal. Recently, the matter was discussed in the meeting of the advisory council and it was said to take the necessary initiative to bring back the money. Still no response was received from Padma Bank.
When the financial condition of the bank is very bad, how will this money be recovered? He said, "Though the condition of the bank is not good, we have to recover the money owed." For this we are looking towards the government and Bangladesh Bank.
More institutions whose funds are withheld
Although huge amount of deposits of various government institutions have been stuck in Padma Bank for years, Nafiz Sarafat, the former chairman of the bank has used political influence to take the renewal facility for a long time. Finance Ministry officials said that he has been withholding money for years without taking into consideration the request of the customer organization for refund.
Chittagong Port Authority has recently sent a letter to Bangladesh Bank and the Ministry of Finance seeking assistance to get back the Tk 179 crore stuck in Padma Bank. State-owned Life Insurance Corporation had deposited Tk 109 crore in Padma Bank. By 2018, the amount of interest increased to Tk 125 crore. Since then, Jeevan Bima Corporation has not received the money back despite sending 31 letters to Padma Bank for deposit encashment.
Titus Gas Transmission and Distribution Company kept Tk 53 crore FDR in Padma Bank for three years from 2015 to 2018. This institution was also forced to renew the FDR till 2029 on the condition of phased repayment as per Padma Bank's proposal. Bangladesh Telecommunication Regulatory Commission (BTRC) FDR of Tk 25 crore is also stuck in this bank.
Padma Bank Scam
Less than three years after its inception, Padma Bank came under fire for financial irregularities. According to an investigation report by Bangladesh Bank, between 2013 and 2017, more than Tk 3,500 crore was diverted from the bank through irregularities, a large part of which is now defaulted.
Based on these incidents, allegations of corruption were raised against the then chairman of the bank, former home minister Mohiuddin Khan Alamgir and the chairman of the audit committee, Mahabubul Haque Chisti. The two accused were forced to resign in November 2017.
In 2018, the government took action to restore the bank. As part of this, Sonali Bank, Janata Bank, Agrani Bank, Rupali Bank and Investment Corporation of Bangladesh (ICB) bought 60 percent shares of the bank by investing Tk 715 crore.
However, these state-owned institutions also did not receive any dividend against the investment as the bank made continuous losses after the investment. On the contrary, the three investor banks and ICB are paying interest to the depositors against these funds.
