Bangladesh has announced that its government is preparing to formally put forth a longstanding claim of $4.52 billion from Pakistan during foreign secretary talks scheduled for April 17 in Dhaka. This will be the first official meeting between the two countries at this level in 15 years.

Bangladesh demands its share of undivided Pakistan’s assets prior to the 1971 Liberation War. The claim includes diverted foreign aid, unpaid provident funds of civil servants, unrepatriated savings instruments and other outstanding financial dues.

$200 Million in Cyclone Aid 

It is reported that a $200 million sum in foreign aid was originally sent to East Pakistan in the aftermath of the 1970 Bhola cyclone. According to officials from the foreign ministry, the money was deposited with the Dhaka branch of the State Bank of Pakistan but was later transferred to the Lahore branch during the Liberation War.

“The cyclone aid was never used for the intended victims in East Pakistan. Instead, it was siphoned off in the middle of a humanitarian crisis,” said a senior ministry official.

Unpaid Funds of Government Employees

Another issue of the claim involves the provident fund balances and savings instruments owed to East Pakistani government employees who returned from West Pakistan after independence. Despite the government's repeated efforts, these dues were never refunded.

The government of Bangladesh has prepared a detailed report with data compiled by Bangladesh Bank, including documents showing these financial transactions. Officials said this evidence would be presented during the upcoming meeting and again in later foreign minister-level talks expected to take place in Dhaka this month.

On March 27, the foreign ministry sent a formal letter to the Bangladesh Bank governor and the secretary of the Finance Division, requesting any remaining supporting documents needed to finalise the claim. 

Previous Claims and Efforts

It has been reported that this is not the first time Bangladesh has raised the issue. During the last foreign secretary-level meeting in 2010, Dhaka also specified its demand for a fair share of pre-1971 assets and demanded a formal apology from Pakistan for the 1971 genocide, as well as the return of stranded Bangladeshis.

According to official records from the foreign ministry, Bangladesh has been demanding the return of the $200 million given as aid for cyclone relief and an additional $4.32 billion for a long time, which represents its proportional share of the total financial assets of undivided Pakistan.

According to the report, Bangladesh was entitled to approximately 56% of these assets as per the population share. As per foreign exchange earnings, the country’s share is estimated at 54%. Bangladesh argues it should receive at least 50%.

The Planning Commission's report dated December 16, 1971, documented that Tk90 lakh in provident funds owed to East Pakistani civil servants were withheld by West Pakistan. Another Tk1.57 crore held by Rupali Bank’s Karachi branch was never returned. Instead, Pakistan converted it into company shares and notified Rupali Bank without ever paying any dividends. Bangladesh had failed in the attempts to recover the funds through share sales.

Pakistan's Old Debts Cleared by Bangladesh 

The Bangladesh government also took the responsibility for settling several pre-independence financial instruments originally issued by the Pakistani government, including defence savings certificates, income tax bonds, and other investment tools. Bangladesh paid debts that it argues should have been cleared by Pakistan.

An official document titled “Statement of Bangladesh Bank Claims Receivable from State Bank of Pakistan and Government of Pakistan” shows the details and breakdown of the outstanding claims.

As of December 16, 1971, Bangladesh argues that half of the currency in circulation, valued at Rs 870.58 crore, belongs to it. The banking department of Pakistan alone owes Rs 59.63 crore to Bangladesh.

Bangladesh has cited more claims, including Rs 88 lakh as 50% of the paid-up capital, Rs 22.62 crore as 50% of statutory funds, Rs 6.07 crore as half of balances held outside Pakistan and Rs 27.58 crore under other miscellaneous assets.

Moreover, Bangladesh took on Tk21.38 crore worth of debt securities issued by both the central and provincial governments of pre-1971 Pakistan including Tk14.07 crore in central government loans, Tk2.77 crore in East Pakistan government loans, Tk1.15 crore in West Pakistan government loans, Tk2.46 crore in savings certificates tied to international trade units and Tk65 lakh linked to Pakistani prize bonds