The government has asked the banks to make sure that their CSR funds are not used for militant or terrorist financing, officials have said.
The Finance Ministry move comes after the Home Ministry has repeatedly expressed concerns in this regard.
The Bank and Financial Institutions Division of the Finance Ministry yesterday issued a circular, signed by Deputy Secretary Rajanul Huda, imposing bar on the utilisation of the banks’ CRS funds for financing terrorist activities.
State Minister for Home Asaduzzaman Khan told Dhaka Tribune yesterday: “There are allegations that money from the Corporate Social Responsibility fund of the Islami Bank Bangladesh Limited went into militant financing. This matter also came up in the first meeting of the Anti-Militant Financing Task Force.”
He also said his ministry was now investigating the usage of Islami Bank’s CSR fund and looking into how some
of the other banks, who follow the Islamic way of banking, use their respective funds.
Corporate Social Responsibility (CSR) is a form of corporate self-regulation, which involves actions that further social goods, beyond the interests of the firm and that which is required by law.
Officials said the circular was meant mainly for the private commercial banks and not the state-owned ones. They said the Home Ministry had alleged that the money from the CSR funds of several banks was spent for legal support for some of the terrorists in jail.
Recently, the Bangladesh Bank has identified 10 suspicious accounts in several private commercial banks which could have been used for financing militant activities, including purchase of weapons and subversive activities.
According to the Bangladesh Financial Intelligence Unit (BFIU) of the central bank, those accounts belong to the Jhigatola branch of Dutch Bangla Bank Limited, the Dhanmondi branch of the Al-Arafah Islami Bank and the Shahjalal Islami Bank.
The BFIU revealed this information during the first meeting of the task force, led by Industries Minister Amir Hossain Amu, on September 11.
The 17-member task force was formed on August 20 to strengthen coordination among different government agencies working to trace the source of militant funding.
Banking Division Secretary M Aslam Alam told the Dhaka Tribune: “If the officials of a bank suspect that their CSR fund is being used for enhancing terrorist activities, they should immediately stop releasing funds. They should also look after how the funds are being used at the grassroots level.”
Seeking anonymity, a central bank official said banks’ CSR funds had been used politically in the past both against and in favour of the government.
Monirul Islam, joint commissioner of the Detective Branch (DB) of Police, told the Dhaka Tribune: “In the past, some non-government organisations have financed militant groups using the banking channel. However, that has stopped now. They are now doing it via informal channels.”
Contacted, security specialist Maj Gen (retd) Abdul Rashid said the central bank was yet to thoroughly investigate how the Islami Bank Foundation had used money from the Islami Bank ‘s CSR fund.
According to the central bank, the existing banks in the country spent a total of Tk442 crore on CSR programmes last year which was up by more than 45% from the previous year.
More than Tk138 crore was spent on humanitarian grounds and disaster relief, followed by Tk129.52 crore on education. In 2013, the banks spent Tk304 crore, Tk219 crore in 2011 and Tk233 crore in 2010.
