Sajjadur Rahman
A debate over the ownership of the Grameen Bank is brewing, as the finance and foreign ministers have repeatedly claimed Grameen is a government institution.
A question about the government’s stake in the bank came to the fore after the “removal” of Nobel laureate Prof Muhammad Yunus from the post of its managing director.
Grameen’s borrowers own 95 percent of its total equity. The remaining five percent belongs to the government, shows the Grameen Bank website without mentioning any time when the statistics were compiled.
However, Grameen in a statement yesterday claimed that the government’s share in the organisation has come down to 3.5 percent.
The government can obtain up to 25 percent stake in Grameen as per the law.
A question arises whether the government can claim the bank to be one of its organisations.
The present government, which holds only three seats in the 12-member Grameen board, now behaves as if Grameen is a state-controlled bank, not owned by its eight million borrowers.
Dr Salehuddin Ahmed, who headed Bangladesh Bank for four years until May 2009, sees no reason why the government should claim the Grameen Bank as one of its institutions.
“You cannot call it a government institution. It was set up by the government under a special act,” said Ahmed.
He said the bank is a legal entity, not a government institution.
A look into the Grameen’s capital base and the government stake in it can clarify the matter.
When the bank was established in 1983 with a paid up capital (equity) of Tk 3 crore, the government’s share in it was Tk 1.8 crore or 60 percent. Borrowers of the bank owned the remaining 40 percent, half of which belonged to female borrowers, according to the Grameen Bank Ordinance 1983.
The government in an amendment in 1986 raised the paid up capital to Tk 7.2 crore without subscribing proportionately to its ownership, reducing its stake to 25 percent. The rest belonged to the borrowers of the bank.
Over the years, the bank has increased its paid up capital that went up to over Tk 52 crore at the end of 2009 from Tk 35.8 crore the previous year.
The bank’s paid up capital was Tk 31.8 crore in 2007 and Tk 26.95 crore in 2000.
“Grameen Bank has increased its paid up capital almost every year. But the government did not subscribe. So its shares have come down gradually and now stands around 5 percent,” said a senior central bank official.
Government high-ups quite often mention that the Grameen Bank was established by a 1983 ordinance, a special law.
“As per the law, the government has some sort of role in the bank. But it cannot control or claim the bank’s ownership,” said the former governor of Bangladesh Bank.
The central bank on Wednesday issued a letter on Yunus’ removal from the post of managing director of Grameen Bank for violating one of the statutes.
Wishing anonymity, a top Bangladesh Bank official said they could do nothing as the government wanted Yunus to quit the Grameen Bank he founded in 1976.
Both Grameen and Yunus have expanded well beyond banking. Yunus founded nearly 25 companies in many sectors — energy, telecom, education, fisheries, dairy, software, internet, knitwear and fashion — all of which aim at improving the living condition of the poor.
In 2006, Yunus and Grameen Bank received the Nobel Peace Prize for their efforts at economic and social development.
Courtesy of The Daily Star
