• Monday, Sep 21, 2020
  • Last Update : 10:28 pm

JS passes controversial Grameen Bank bill

  • Published at 07:57 pm November 5th, 2013

Parliament on Tuesday passed a new law to govern Grameen Bank amid disagreement between the Awami League and Jatiya Party lawmakers, who praised Nobel Laureate Dr Muhammad Yunus, founder of the bank, for his pro-poor initiatives.

Jatiya Party MP Mujibul Haque questioned the justification of passing the Grameen Bank Bill 2013, a money bill, without prior assent of the president in line with the constitution.

He also asked whether the government should enact the much-talked-about bill ahead of the national elections.

Countering the question, Finance Minister AMA Muhith at first admitted that the proposed law was a money bill that required the president’s consent.

He later shifted stance to say that articles 81 and 82 of the constitution had not made it mandatory for the government to seek the president’s assent as the bill had nothing to do with imposing or reducing taxes.

Mujibul Haque discussed his amendments to the bill and proposals for eliciting public opinion and sending it to the selection committee before passage.

He said people had been getting wrong messages about the bill because the fates of a huge number of people were linked with it.

Dr Yunus had played a champion’s role to make the poor rural women self-reliant by providing them with collateral-free loans, he added.

“Criticisms are there about the rate of interest that the Grameen Bank charges, but its rate is less than the rural money lenders,” said Haque amid protests from the ruling Awami League MPs.

When the JP lawmaker sought more time, Speaker Shirin Sharmin Chaudhury allowed him two additional minutes.

According to parliamentary rules, the finance minister then took floor and countered Haque’s speech.

“Dr Yunus is our country’s pride. He brought Nobel for us. But he could provide loans without collaterals because of the government,” Muhith said.

He also said the government had not proposed any change to the character of the Grameen Bank. The law was enacted in line with the directives of the Supreme Court.

The House then rejected Mujibul Haque’s proposals by voice vote, and subsequently passed the law.

Contents of the Bill

The newly passed law will allow board meetings with the presence of three out of the 12 members of the board of directors. The government will appoint three members to the board which can take any policy decision, bypassing the nine elected board members.

Critics say the government scrapped the Grameen Bank Ordinance 1983 only to “occupy” the bank that Dr Yunus had found. He was removed from the post of the managing director of the Bank on charges of violating rules.

The existing ordinance has the provision for holding the meeting with four directors.

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

In consultation with the board, 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 – the chief executive of the microcredit bank that has 8.3 million borrowers.

Under the new bill, the central bank is the authority for appointing the managing director, who must have knowledge on rural economics, macroeconomics or microfinance.

The Grameen Bank Bill 2013 stipulates that the bank can provide loans to all landless people, with or without collateral, “for all economic activities” other than foreign exchange conversion business.

The managing director will be a full-timer and serve upto 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 entity.

The government alleged that the Grameen Bank had business links with 54 other companies such as the Grameenphone, Grameen Trust, Grameen Fund, Grameen Telecom, Grameen Cybernet, Grameen Shakti, Grameen Knitwear, Grameen Byabosa, and so on.

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

Section 36 says the government can issue any order to resolve any inconvenience that comes to the fore for the execution of the proposed law.

The finance minister on October 27 tabled the Grameen Bank Bill 2013 that went to the parliamentary standing committee for scrutiny. The watchdog on October 30 unanimously recommended its passage.

The House also enacted the Asian Reinsurance Corporation Bill 2013 to replace the Asian Reinsurance Corporation Ordinance 1978.  

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