In its latest move, the government has extended the deadline for the Grameen Bank Commission to complete its final report on the financial and operational links of the micro-lender with its sister organisations by 20 days.
Another committee has recommended fresh rules to elect the nine borrower-directors for the bank under an election commission appointed by the government.
The original deadline for submission of the final report was on June 30. The Bank and Financial Institution Division issued a circular on Sunday regarding the extension. Joint Secretary of the division, Gokul Chandan Das, signed the circular.
A senior official of the division said the commission would submit its final report on the capitalisation of Grameen Bank, and its future course, by July 20, but also mentioned that this date was subject to change.
The official said some of the recommendations made in the interim report submitted to the finance minister in February have already been executed. These include increasing the government stake in the bank.
Another official of the banking division, seeking anonymity, said: “The commission sought two months to finalise the report. But due to pressure from home and abroad, the government has increased the tenure of the commission by 20 days.”
On May 15 last year, the Bank and Financial Institutions Division formed a four–member commission under The Commissions of Inquiry Act, 1956. At that time, the commission members were given three months’ time to submit their report.
The commission, headed by retired secretary Mamunur Rashid, is reviewing the purposes, legal status and operations of the institutions, companies and enterprises established by Grameen Bank. Other members of the commission are Barrister Ajmalul Hossain QC, and Mosleh Uddin Ahmed FCA. The director general of the Planning and Development Academy, MA Kamal, is serving as the commission’s member secretary.
However, the commission postponed its much talked-about workshop regarding the bank’s restructuring issue - originally scheduled to place yesterday - citing “unavoidable reasons.”
Controversies over the commission surfaced in February as its report states that Grameen Bank is a government bank, and also suggests that the government set a minimum educational requirement for the elected directors of the bank.
The commission caused further debate a couple of weeks ago, after it was revealed that the body was planning to propose splitting the bank into 19 zones, or restructuring it in a way where the government secures at least 51% of the shares in the bank.
Noble laureate Dr Muhammad Yunus alleges that the government is trying to gain control of the bank he founded. He recently said the government’s attempts to break up the bank into pieces would be resisted. “If the people of the country wake up, then no one will be able to break it up. Although the government has unlimited power, it will not be able to do that,” he said.
Meanwhile, the BNP acting secretary general, Mirza Fakhrul Islam Alamgir, recently met with Dr Yunus, who is also a recent recipient of the Congressional Gold Medal, the highest civilian award conferred by the US. While speaking to journalists after the exclusive meeting, he termed the proposal of breaking up the Grameen Bank into pieces as a “conspiracy,” and urged the government to refrain from taking such a harmful decision.
Grameen Bank’s directors (who hold a majority in the 12-member board) and its employees’ association condemned the proposals, threatening to instigate a movement unless the commission scrapped its recommendations. Until recently, the government only had a 3% stake in the bank. After a recent investment, its share now stands at 25%.
No major change in GB likely: Atiur
The central bank has not found anything that requires a major change in how Grameen Bank operates, Bangladesh Bank Governor Atiur Rahman said at a discussion on microcredit in the capital on Monday.
He made the remark upon Bangladesh Bank’s annual inspections on the Grameen Bank. “Moreover, I should clarify that Bangladesh Bank has had nothing to do with the Grameen Bank Commission,” says a statement.
Fresh election rules in the offing
The government is set to formulate the Grameen Bank Election of Directorate Rules 2013, having a provision to elect the nine borrower-directors through two elections, says a draft proposal.
An election commission appointed by the government will hold the polls.
The government will fix the date of the election, which may be held within six months of the rules' implementation. It will also have the authority to set the directors’ tenure.
A two-member committee formed three months ago submitted the recommendations to the Bank and Financial Institution Division on June 16. The members are Supreme Court Additional Attorney General Murad Raza, and the managing director of IFIC bank, M Shah Alam Sarwar.
Currently, the nine female directors are elected for three-year terms from among the borrowers, while the government nominates the other three directors, including the chairman.
The move threatens to politicise the bank, as the draft proposal grants the government more authority to exercise its power in the bank, alleges a director.
Last April, Finance Minister AMA Muhith termed the electoral system of the microcredit organisation “undemocratic and unauthorised.” Earlier, the government planned to amend the electoral rules to pick “competent and educated” directors for the micro-lender.
As per the draft rules, the 8.4m shareholders of the bank will take part in the general elections to elect 15 representatives.
Two electorates with nine special and 15 deputy electorates will be appointed by the bank’s management to oversee the election of nine directors. They will scrutinise records of the representatives elected in the general elections.
The 15 members will cast their votes to elect the nine-strong board of directors, according to the draft. The three other directors, including the chairman, will be appointed by the government.
The nine directors will hold their post for three years. But, one-third of them should be dropped through lottery or mutual understanding after the expiry of the board’s tenure. The retired directors will not be able to participate in the elections for two consecutive years, says the draft.
The bank’s secretary will assist the officials and staff to organise the elections and will have the authority to declare any voter disqualified. The returning officer and deputy returning officer will be treated as deputy election commissioners.
Tahsina Khatun, a director of the micro-lender, expressed concern over the government’s move to amend the election process alleging: “Through this, politics will enter the bank.”
She also told the Dhaka Tribune that the issue of formulating fresh electoral rules was not placed before the bank’s incumbent board of directors.
