How banks are easy prey for political funding
During Hasina’s regime, banks were forced to make donations through CSR programmes to support Awami League election campaigns and activities.
Highlights
- Banks funded referendum "Yes" campaign under interim government pressure
- CSR funds allegedly misused for political campaigning by governments
- Banks previously funded Awami League-linked activities during Hasina's rule
- Bangladesh Bank pressured banks despite legal restrictions on campaigning
- ABB provided Tk2.52 crore after banks resisted direct CSR use
- SAD leaders accused of hiding referendum campaign fund expenditures
Banks seem easy prey for political funding. The latest example is the Tk3.7 crore in funding raised from banks for a "Yes" vote in the referendum held alongside the general election on 12 February this year.
The funding during the interim government led by Muhammad Yunus drew widespread criticism as banks were compelled to provide funds under the guise of corporate social responsibility (CSR) to implement its political agenda, even though such funds are meant for social welfare.
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However, this was not a new experience for banks, which had faced similar undue pressure during the 17-year autocratic rule of former prime minister Sheikh Hasina.
During Hasina's regime, banks were forced to make donations through CSR programmes to support Awami League election campaigns and activities.
For instance, one of the largest collections came in 2022 and 2023, just ahead of the January 2024 general election that secured Hasina a fourth consecutive term in office. Around Tk1,200 crore was collected from banks through the Prime Minister's Relief Fund under CSR allocations.
The funds were handed over through pay-order cheques directly to Sheikh Hasina. However, banks were unaware of the account into which these donations were deposited due to the nature of the cheques.
The Yunus-led government did not initiate any investigation into the use of the PM's fund; rather, it applied the same strategy, forcing banks to fund the "Yes" vote campaign in the referendum held alongside the general election.
Following a directive from the Chief Adviser's Office, the Bangladesh Bank, at a meeting with private commercial banks on 11 January, instructed banks to put up two banners in each branch to raise public awareness and encourage a "Yes" vote in the upcoming referendum.
"The governor [Ahsan H Mansur] called us and said that a large amount of money should be provided by banks to campaign for a 'Yes' vote…Later, it was decided that the money would come from ABB's fund instead of the banks."
In addition to the banners, banks were advised to use funds to support NGO-led public awareness programmes focused on the referendum.
The meeting was presided over by then Bangladesh Bank governor Ahsan H Mansur, while Financial Institutions Division Secretary Nazma Mobarek was also present.
Mansur himself had earlier spoken about being pressured to contribute to the PM's Relief Fund during the Hasina era when he served as chairman of BRAC Bank.
Recalling his experience, he previously told The Business Standard, "I also went to hand over a cheque of Tk25 crore to the prime minister for the relief fund from a bank; that was the reality then."
He mentioned that the initiative was led by Bangladesh Association of Banks Chairman Nazrul Islam Mazumder, adding that the government should investigate whether the relief fund had been properly utilised.
However, when a similar instruction came from the Chief Adviser's Office, he, as part of the interim government, could not resist and had to suggest that banks raise a Tk100 crore fund for the "Yes" vote campaign.
The interim government, however, did not stop at suggestions; it later forced banks to fund the "Yes" vote campaign despite strong objections from bankers. They demanded written instructions on spending CSR funds for political campaigning, but the central bank declined to provide them, according to bankers.
Eventually, nearly Tk3 crore was arranged through the Association of Bankers Bangladesh (ABB) rather than directly from banks' CSR funds.
Banks were asked to fund three organisations involved in referendum-related campaigning, including the Students Against Discrimination Foundation, established by leaders of the Students Against Discrimination (SAD), which at the time was not yet registered.
ABB agreed to provide Tk2.5 crore to Shushashoner Jonno Nagorik (SHUJAN) and between Tk20 lakh and Tk25 lakh to Debate for Democracy.
Masrur Arefin, ABB chairman, told The Business Standard that the then central bank governor had requested funding from CSR allocations to support the referendum campaign. However, after being informed that banks' CSR funds could not be used for that purpose, some money was later provided from ABB's own fund.
"At the instruction of governor Ahsan H Mansur, Tk2.52 crore was provided to SHUJAN for the referendum campaign," he said.
Masrur said, "The governor called us and said that a large amount of money should be provided by banks to campaign for a 'Yes' vote. We asked for written instructions and informed him that board approval would be required. Later, it was decided that the money would come from ABB's fund instead of the banks."
He said the process was carried out through several meetings between Bangladesh Bank and ABB representatives and that the organisations involved had submitted preliminary expenditure reports.
Meanwhile, SAD rushed to secure registration for its foundation and later received Tk1 crore from Bangladesh Bank's CSR fund. Arief Hossain Khan, spokesperson for Bangladesh Bank, also confirmed the Tk1 crore allocation to SAD Foundation, saying that the organisation had initially requested Tk12.89 crore for an online referendum campaign.
The Bangladesh Bank forced banks to fund the "Yes" vote campaign even though involvement in campaigning by any government agency or employee is a punishable offence.
The Election Commission (EC) issued a letter on 29 January instructing government officials and employees to refrain from taking part in any campaign in favour of either "Yes" or "No", stating that it would be considered a punishable offence under Section 21 of the Referendum Ordinance, 2025, and Article 86 of the RPO, 1972.
Meanwhile, allegations of embezzling at least Tk1 crore raised for the "Yes" vote campaign have been brought against three top SAD leaders.
At a press conference at Madhur Canteen at Dhaka University on 23 April, the organisation's central spokesperson Sinthiya Zaheen Ayesha accused senior leaders of financial irregularities and a lack of transparency.
"At least Tk1 crore was collected through a foundation to campaign for the 'Yes' vote in the referendum for the 13th national parliamentary election," she said.
"But despite being the spokesperson, neither I nor other responsible members of the committee were given any information about this fund. Instead, information was concealed and extreme opacity was maintained."
Muhammad A Rumee Ali, former deputy governor of Bangladesh Bank, said, "I believe in the concept of Corporate Social Responsibility (CSR), but not in the way it is practiced and promoted by many corporates and accepted worldwide as a best practice. I see it at best as 'fig leaf' to use shareholders' funds inappropriately for the benefit of a few and 'sell' the narrative to the community."
"I think CSR has been made into a convenient compartmentalised box into which some money is injected and shown 'good deed' while rest of the company goes on exploiting the market and doing everything which cannot be considered ethical. It allows the company to divert the attention of the community. Some of the banks in our country, where the directors have stolen the depositors funds with their criminal practices were spending crores on so-called 'CSR'. I often say the first CSR activity for a bank is to safeguard its depositors' funds."
"I consider CSR to be a concept that should woven into the architecture of the company. The focus of the company should of course be to generate a profit that ensures sustainable but its processes must respect the laws of the country, the interests of the community, care for the environment and the well-being of its employees. These ground rules should run through all their systems and processes. This is real Corporate Social Responsibility," he said.
How banks were forced to fund AL activities
During Sheikh Hasina's regime, banks were regularly forced to donate from CSR funds and finance programmes associated with the former prime minister, her family and Awami League-linked organisations and activities.
In 2023 alone, banks spent Tk15 crore under the sports and entertainment category of CSR spending.
The amount was donated to the Father of the Nation Bangabandhu Sheikh Mujibur Rahman Memorial Trust for producing a full-length film on his biography, to the Sheikh Russell Jatiya Shishu Kishore Parishad for organising an Under-16 tournament, to the Bangladesh Olympic Association for celebrating the Sheikh Kamal 2nd Bangladesh Youth Games, and to the Bangladesh Army for organising the Bangabandhu Sheikh Mujib Marathon-2024 Tournament.
Additionally, donations were made for distributing food items among poor and marginalised communities as part of the observance of National Mourning Day marking the death anniversary of Bangabandhu Sheikh Mujibur Rahman.
In the same year, banks spent Tk163.10 crore on the education sector and Tk288.97 crore on the health sector. A significant portion of these amounts was donated to the Prime Minister's Education Assistance Trust, and for the construction of a medical college named after Sheikh Hasina's mother, Begum Fazilatunnesa Medical College.
Under the Environment and Climate category, banks spent Tk68 crore in 2023, with a significant portion donated to the Prime Minister's Ashrayan Project, also known as the Ashrayan-2 Project, under which the Prime Minister's Office was building homes for homeless and displaced people.
Additionally, banks were compelled to donate over Tk100 crore in 2020 and 2021 to the Bangabandhu Memorial Trust for the centennial celebration of Sheikh Mujibur Rahman, which began in March 2020.
These donations were made under the Sports and Entertainment category of CSR programmes, even as the entire country was grappling with the Covid-19 pandemic.
The country's banking sector donated over Tk3,000 crore to the Prime Minister's Relief Fund under CSR programmes in the nine years up to 2023, according to Bangladesh Bank data.
During this period, banks spent Tk7,099 crore under CSR, 44% of which went to the PM's relief fund as donations, disregarding the CSR guideline that sets a maximum limit of 20% for this purpose.
