Bangladesh Bank would incorporate a provision in its corporate social responsibility policy now being prepared to prevent banks from diverting CSR funds to terrorist or militant financing. A directive in this regard was issued during the third meeting of the Anti-Militant Financing Task Force at the home ministry last month.
The central bank also explained at the meeting as to why money from loan default compensation funds, especially of the Islamic banks, could not be used for CSR purposes. The compensation funds are created from fines that banks collect when borrowers fail to pay their instalments in due time.
At present, there is no binding umbrella policy governing the formation of CSR funds. Earlier this month, as per directive from the task force, Bangladesh Bank Deputy General Manager Arif Hossain Khan wrote to the Home Ministry and the Bank and Financial Institutions Division, informing them about the suspected use of Islami Bank Bangladesh Limited’s CSR funds in militant financing. Simultaneously, central bank General Manager Monoj Kumar Bhasusi sent another letter to the same recipients informing them about the decision to incorporate the possible use of CSR funds in militant financing in the proposed policy. Bank Division Secretary M Aslam Alam told Dhaka Tribune: “The Home Ministry is now further investigating into a Bangladesh Bank report on the use of Islami Bank’s CSR fund in possible terrorist financing.”
He said: “The Home Ministry will find out how the persons who got money from the bank’s CSR fund were not supposed to get it.” Sources in the Home Ministry said high officials of the Islami Bank took financial support from its CSR fund during the election-resistance movement in January and the agitation programmes centring Jamaat leader Kadar Mollah’s execution.