Padma Bank to find ways to return Tk 874cr climate fund

Crisis-ridden Padma Bank will find a way to return around Tk 874 crore to the Bangladesh Climate Change Trust (BCCT) after a new board of directors is formed.

The decision was taken at a meeting featuring representatives from the Bangladesh Bank, Padma Bank, BCCT and the ministries concerned at the central bank headquarters on Thursday, according to an official.

The central bank dissolved the bank's previous board after the political changeover on August 5, but it is yet to form a new one.

Padma Bank, formerly known as Farmers Bank, took Tk 536 crore from the BCCT as a fixed deposit receipt (FDR) in 2015 for a period of one year.

Upon maturity, the FDR was renewed until 2018 as Padma Bank had managed to return only Tk 74 crore in several phases. It has made no payments to the BCCT since.

Rather, in January this year, the bank converted Tk 760 crore into preference shares with an 8-year tenure at an interest rate of 6 percent.

It did not seek the consent of the BCCT before making this move, according to officials of the trust.

The issue of recovering the money owed to the BCCT resurfaced at a meeting of the Advisory Council on September 12.

Beginning operations as Farmers Bank in 2013, the private lender fell into trouble three years after its establishment due to massive irregularities.

Yet, due to political interference and the lure of high interest rates, government agencies such as the BCCT continued to invest significantly in the bank.