A new set of government-coined rules for electing the board of directors of the Grameen Bank has given more power to the central bank – a move that grassroots borrower-directors say will harm the organisation’s interests.
According to a circular issued yesterday, the Grameen Bank (Election of Director) Rules 2014 replaces the Grameen Bank (Election of Directors) Rules 1987.
As per the new rules, the Bangladesh Bank will from now on appoint the three election commissioners, who will oversee the election of nine borrower-directors from the grassroots. The remaining three members of the board including its chairman are elected by the government.
Under the 1987 rules, the board of directors used to appoint the election commissioners. But from now on, the three-member commission will be selected jointly by the central bank governor, chairman of the Grameen Bank and the Micro-Credit Regulatory Authority. The governor will appoint the chief election commissioner.
The bank authority will have to hold elections within six months of implementing the new rules, made by the Banking Division of the Finance Ministry following recommendations from an expert panel as part of a plan to restructure the Nobel-winning microfinance institution to boost oversight and rein in its activities.
The circular also said independent individuals would act as election commissioners and the district deputy commissioner as returning officers. The presiding officers will be selected from among the officials of the scheduled banks.
Finance Minister AMA Muhith has said in the past that the bank has not seen any election in the last 30 years because its chairman Prof Muhammad Yunus used to handpick the borrower-directors.
However, Tahsina Khatun, one of the nine borrower members of the existing board, told the Dhaka Tribune that: “We fear that politics will penetrate the Grameen Bank riding on the new election rules. It [the rules] is part of the government’s scheme to take over the bank.”
She said: “Every item in the election rule goes against the interest of the bank, and is, therefore, unnecessary... The Grameen Bank board will meet this month to protest the matter.”
As soon as the new election commission announces schedule for the three-tier election system, the existing board of directors will expire, says the circular.
The election commissioners will divide the 2,567 branches of the bank into nine zones. The head of a branch nominates the most qualified borrower and sends her to compete at the area level. The areas then forward a candidate to the zonal level. Nine borrowers are to be elected as directors from the nine zones or constituencies, the circular says.
The bank currently has 86 lakh members, all of whom are eligible to vote for electing the nine grassroots directors.
