Climate trust deposits fund with FBL for higher returns

Climate Change Trust Fund (CCTF) had decided to deposit its money with Farmers Bank Limited (FBL), considering higher interest rate offer.

The fund was deposited without exercising necessary due diligence to examine the financial health of the bank, however.

The CCTF authorities explained their position at a JS body meeting Tuesday, in response to a question about the procedure of depositing the fund with such a 'low-rating' bank.

Parliamentary standing committee on Ministry of Forest and Environment also discussed the issues relating to a sum of Tk 5.08 billion stuck up fund of the Trust with the bank.

However, the ministry informed the committee that the fund was deposited with the FBL as they did not get the CAMEL rating for both the public and private banks.

The fund was deposited for one year taking into consideration the higher rate of interest, the CCTF informed the committee.

Earlier, at the 8th board meeting of the CCTF in 2011, it was decided that the FDR should be deposited only after collection of offer letters and analysing the CAMEL rating of different banks.

The CCTF Trustee Board chairman was responsible for resolving and approving the FDR-related issues.

It was also decided that all the activities related to fund deposit must be informed to the board. The chairman and minister approved the decision to deposit the fund.

It was found from the working paper of the ministry that the CCTF has deposited Tk 5.08 billion with different branches of the FBL without following the decision of the trustee board.

It explained that they sent letters to Bangladesh Bank on November 10 in 2014 and December 21 in 2015, asking for the CAMEL rating of various banks.

BB replied that all the banks, except Bangladesh Commerce Bank and ICB Islami Bank which were under problem bank category, were doing business with full capacity.

Of the total amount deposited with the FBL, the FDR tenure of Tk 3.93 billion has already expired and the CCTF sent letters time to time for its encashment. But FBL expressed their inability to refund the money due to their liquidity crisis.

The environment ministry has sent letters to BB governor and secretary of the banking and financial institutions division in this regard, the ministry informed the committee.

CCTF has deposited Tk 622 million in 2017 and 2018 with Gulshan branch of FBL. A decision has been taken to renew the FDR for another three months.

CCTF deposited TK 3.84 billion with Motijheel branch of FBL for which letters for encashment has been sent.

It also deposited Tk 528 million with Gulshan South Avenue branch for which letter for encashment sent. But the branch requested to renew the FDR for another three months, which is under consideration.

CCTF has deposited Tk 85 million with AB Bank Ltd's principal branch at Dilkusha.

However, after holding the 39th meeting of the JS body, its chairman Hasan Mahmud told the media that the deposited fund stuck up with the FBL will not be lost and that the FBL has taken some time to give it back. He, however, could not mention any specific date.

He also said the decision to cut some 2,312 age-old trees for widening the Jessore-Benapole Highway was taken without having prior permission and clearance certificate from the concerned departments.

"It was a wrong decision. We have suggested necessary steps to widen any road or highway without felling trees," he said.

Besides, the committee also expressed its concern over the significant fall in the number of tigers in the Sundarbans that now stands at 106, he said.

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