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Government worried about climate fund money in Farmers Bank

  • Published at 01:05 am December 15th, 2017
Government worried about climate fund money in Farmers Bank
The government is concerned about the cash-starved Farmers Bank Ltd (FBL) refusing to pay a matured fixed deposit of Tk220.70 crore that belongs to the Bangladesh Climate Change Trust Fund. The Ministry of Environment and Forests has asked the Bangladesh Bank and the Bank and Financial Institutions Division (BFID) through a letter on November 30 to expedite the release of the money. The letter, addressed to the central bank governor and the BFID secretary, says Bangladesh Climate Change Trust Fund keeps Tk508.13 crore at three branches of FBL as one-year fixed deposits at several rates of interest. The trust has been managing its’ expenses with the interests of the deposits. Of the money, a Tk220.70 crore deposit at Gulshan corporate branch and another at Motijheel corporate branch matured on November 23. When the trust fund applied to the bank to collect the money and accrued interest, the bank did not pay.
Also Read- Mohiuddin Khan Alamgir resigns as Farmers Bank chairman
In the last week of November, when the ministry sent a letter to the bank, the bank did not respond. The letter says the ministry made contact with the branch managers several times, and found that they were being evasive and did not pay back any money. Despite several attempts, the managing director of FBL could not be reached over phone for comments on this story. Farmers Bank has failed to repay interbank short-term loans of about Tk700 crore to four banks over the past two months. The bank has failed to draw deposits despite offering interest rates over 12%, against the 4-8% rates offered by other banks.
Also Read- Central bank orders removal of Farmers Bank MD AKM Shameem
Recently, the Parliamentary Standing Committee on the Ministry of Finance marked the bank as “risky” for the banking sector in the country and the central bank sent letters to the bank’s board asking that it remove incumbent Managing Director AKM Shameem. In a recent development, the board of the scam-hit bank went through a major reshuffle; Mohammad Masud, one of the directors of the bank, was appointed as chairman after the then chairman, former home minister Mohiuddin Khan Alamgir, resigned from his position. Meanwhile, the managing director on Wednesday blamed the bank’s board of directors for its current precarious financial situation, saying the FBL management could not run its day-to-day activities due to unauthorized interference by the directors.