The government may place Palli Sanchay Bank bill in the current session of parliament which began yesterday.
“We are going to place the bill in the current session,” State Minister for Finance MA Mannan told the Dhaka Tribune.
The bank is expected to start operation in July 1 this year.
The government’s share in the rural savers’ bank has been increased to 51% from 50% while the remaining 49% share will be owned by member cooperative societies of the “One House One Farm” project.
The bill says the bank’s default borrowers will be served a 15-day notice for the repayment.
Loans will be recovered under the Public Demands Recovery Act 1913.
The Grameen Bank-like lender will collect deposits from its members and provide small loans to them.
But unlike the Nobel prize-winner’s bank, Palli will run general banking like opening of letters of credit (LC), online banking and offering debit and credit cards.
According to the draft bill, the bank’s authorised capital will be Tk1,000crore while the paid-up capital Tk200 crore.
The fund of Tk1,342crore of “One House One Farm project” will be transferred to the new bank intended to help alleviate rural proverty.
The bank will have 10 crore shares at a value of Tk100 each.
The government can raise the paid-up and authorised capitalsthrough gazette notification while the credit holders will transfer their shares to credit holders of same range.
Palli Sanchay Bank will be governed under the Banking Companies Act and controlled by the central bank.
Provision of 14 of the bank companieslaw will be applied.
Earlier, the bank was proposed to be kept out of the control of Banking Companies Law and the central bank.
The proposed bill has not included the previous provisions which exempt the bank from value-added and income taxes, same privilege enjoyed by Grameen Bank.
The bank’s board of directors will consist of 15 members.Seven directors will be selected from the shareholders with the government appointing the other eight.
Eight directors will include a member of Rural Development and Cooperatives Division, director general ofRural Development Board, register of Social Welfare Directorate, a representative from Finance Division and four experts on rural economy and macro-financing. A director will serve a three year-term and can be appointed for maximum two consecutive terms.
The government will appoint chairman with prior approval of Bangladesh Bank. The board of directors will appoint managing director with approval from the central bank. MD can serve until he is 65 years old.
Audit will be conducted by two firms enlisted by Bangladesh Bank. The board will submit audit report to the central bank within three months after the end of a financial year.
A part of profit will be used for reserve fund and bad debts, another part will be distributed among shareholders and the remaining profit will be usedin different purposes of the bank.
If a borrower used false information to get loans from the bank, he would get one-year imprisonment or Tk50,000 fine.
Besides, one will be punished with one-year jail or Tk1 lakh if he uses the bank’s name to serve in his firm’s prospectus.
Some already questioned the viability of the bank as such other specialised banks were yet to achieve their goals.
“It seems that the government will use the bank for their political interest. So, the bank has risks to ensure financial inclusion of rural people,” said a senior official of Finance Division, who wants not to be named. The cabinet last November approved a draft law for the bank.
“The bank will start its functions from first of July. The head office will be in the Palli Development Board in Dhaka,” MA Kader Sarkar, cooperatives secretary, toldthe Dhaka Tribune.
He however said the bank would seek land from the government in and around the Dhaka city to establish a permanent head office.
The draft of PalliSanchay Bank Act 2013 was prepared by the Rural Development and Cooperatives Division and forwarded to the finance ministry’s banking division.
