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Dhaka Tribune

Grameen Bank bill okayed by JS committee

Update : 30 Oct 2013, 07:03 PM

The parliamentary watchdog tasked to scrutinise the proposed Grameen Bank Bill 2013 said on Wenesday the authorities could make the institution accountable to the central bank as the government originally was its major shareholder.

The parliamentary standing committee on the finance ministry, which recommended passage of the law without any major change, said the bank authorities pursued the Ershad government to reduce the government share to 25% from the original 60%.

AHM Mustafa Kamal, the chairman of the standing committee, told the Dhaka Tribune the central bank and the government had a right to know the money circulation of Grameen Bank, which was established through the Grameen Ordinance 1983.

The chairman said he had contacted the Grameen Bank authorities to get their opinion on the law before making recommendations, but the authorities declined to turn up at the watchdog meeting in the absence of Dr Muhammad Yunus, the bank’s founder.

“People do not know that the government gave 60% of the funds to set up the bank while the borrowers owned a 40% stake. But in 1986, he (Dr Yunus) did something for which the Ershad government reduced the share to 25%, making the borrowers share 75%,” said Mustafa Kamal.

“It is not wrong, if the government wants to make the Grameen Bank’s activities auditable,” he said.

The chairman said the government was keen to see a smooth operation of the bank. “Therefore, we have not recommended to change the share pattern of the bank,” he said.

A spokeswoman of the Yunus Centre in Dhaka told this paper she knew nothing about the issue, but that the bank’s acting managing director M Shahjahan may know about it. However, M Shahjahan was not available for comment.

On October 27, Finance Minister AMA Muhith tabled the Grameen Bank Bill 2013 to replace the Grameen Bank Ordinance 1983.

According to the parliamentary rules, the standing committee recommendations are a must for the passage of the law, which is set to pass in the current session before its likely end date of November 7.

The draft law has proposed that two firms will audit the Grameen Bank transactions and send it to the central bank.

Nobel laureate Muhammad Yunus and the government had serious disagreements over the appointment of the managing director. Prof Yunus, removed from the post by the government in 2011, warned the Awami League-led administration against changing the Grameen Bank Ordinance to “capture” the bank of the poor.

The proposed law said the government would appoint a chairman from the three government-nominated directors to the Grameen Bank management board.

In consultation with the board of management, the chairman will form a three to five member selection committee, which will prepare a panel of three candidates for the post of the managing director of the micro-credit bank, which has 8.3 million borrowers.

The central bank is the authority for the appointment of the managing director, who must have knowledge on rural economics, economics or micro-finance.

The managing director will be a full-timer and able to serve up to 60 years of age. Section 20 of the law says the bank cannot run any business beyond its mandated area or transact with any business entities.

The government says the Grameen Bank allegedly has business links with 54 other subsidiaries such as the Grameenphone, Grameen Trust, Grameen Fund, Grameen Telecom, Grameen Cybernet, Grameen Shakti, Grameen Knitwear, Grameen Byabosa and others.

According to the sections 34 and 35 of the law, the government can formulate rules to implement the Grameen Bank law, without violating any section of the law.

The section 36 further says that the government can issue any order to resolve any inconvenience that comes to the fore for the execution of the proposed Grameen Bank law.

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