Parliamentary committee questions keeping climate fund in troubled Farmers Bank

The parliamentary standing committee on environment and forest has questioned the decision to deposit Tk 5.08 billion from the climate fund to the Farmers Bank hit by loan scams and irregularities.

Environment and Forests Minister Anisul Islam Mahmud, who recently swapped portfolio with Water Resources Minister Anwar Hossain Manju, told parliament a week ago they had failed to draw the fund from the troubled bank owned by ruling Awami League MP Muhiuddin Khan Alamgir.

Alamgir, who recently resigned as Farmers Bank chairman under pressure for alleged mismanagement in running the bank, is chairman of the parliamentary standing committee on public accounts.   

Former environment minister Hasan Mahmud now heads the parliamentary standing committee on environment and forests.

After a meeting of the committee on Tuesday, Hasan said at a news conference, “The committee has raised the question as to why Tk 5 billion was kept in the Farmers Bank that has a poor rating.”   

Environment Minister Anisul, a Jatiya Party leader, said the ministry had deposited the money in the bank before he took charge because it offered high interest rate.

“The committee has asked to check a bank’s financial health, not only interest rates, before depositing money in the future,” Hasan said. 

Licensed on political considerations and launched four years ago, the Farmers Bank is facing allegations of disbursing loans beyond the limit permitted by the rules and much of the loans have turned into bad debt, creating a liquidity crisis.

On Jan 23, Anisul told parliament the terms of the accounts with over Tk 4.55 billion of the climate fund kept in the bank have expired and the ministry had reminded the bank several times to cash the fixed deposit instruments.

But the bank has said it cannot cash the FDRs now due to liquidity crisis, he said.  

According to him, the government has deposited Tk 32 billion from the Bangladesh Climate Change Trust fund in banks, including over Tk 13.21 billion in five state-owned banks.

From the fund, Tk 11.91 billion has been kept in fixed deposits. The interest against the deposits is Tk 8.71 billion. Around Tk 6.5 billion accrued from interest has remained unutilised.