Nobel Prize-winning microcredit lender Grameen Bank has been operating without holding any board meetings for past 30 months.
Several bank officials have confirmed that the board of directors has not officially convened since mid-2014.
The Grameen Bank board of directors is a 12-member body with three government-appointed directors and nine borrower-directors, who are selected from the bank’s shareholders and borrowers. When the government took over the bank by implementing the Grameen Bank Act 2013, the nine borrowers were removed from their positions, which remain vacant to this day.
However, the borrowers now demand to be reinstated since the bank did not announce the election schedule after amending the bank’s regulatory rules.
The borrower-directors claim their tenure was set to expire in February 2015, but since the current law states that bank has to elect a new set of directors within 12 months after the amendment, they warrant reinstatement.
In 2015, they filed a writ petition demanding they be reinstated.
Tahsina Khatun, one of the former directors, said: “The bank authorities have not called any board meeting since we filed a case against the bank.”
They filed two more cases against the new committee to select the managing director and the new electoral procedure.
The amended rules could not be implemented due to the pending cases. It prevented major decision from being taken which required the unanimous support of all 12 directors, directly affecting the operational effectiveness of the bank.
To break the deadlock, Grameen Bank Chairman Khandaker Mozammel Haque submitted a proposal seeking changes to the existing rule so that it can pick directors from the borrowers – like the bank did since it was founded.
He said his proposals sought to appoint one of the bank’s officials to supervise the elections of the directors.
The proposal offered some changes which aim to solve the current tangled mess as the new rules are not being implemented.
When the new electoral rules were announced in April 2014, it tasked Bangladesh Bank to form a three-member commission to elect the nine directors.
Later, the Banking Division of the Ministry of Finance amended the rules in October 2014, saying the government itself would form the three-member committee.
According to the new set of rules, the committee will comprise two deputy managing directors, one from a state-owned commercial bank and another from Palli Karma-Sahayak Foundation. A former district judge will serve as the chief election commissioner.
Previously, the board of directors would elect a bank official to conduct the election.