prof yunus - Dhaka Mirror

Grameen fettered

Admin — Thu, 02 Aug 2012 20:40:43 +0000

Changes to ordinance give govt-appointed chairman almost absolute power to pick MD, Yunus’ income under scrutiny
The cabinet yesterday approved a proposal for amending an ordinance to give more powers to the Grameen Bank chairman to choose the managing director of the microlender.
The amendment to the Grameen Bank Ordinance 1983 will undermine the autonomy of the bank started by Nobel Peace Prize laureate Prof Muhammad Yunus.
It will give the bank’s chairman, always picked by the government, almost absolute powers to appoint the organisation’s chief executive sidelining other members of the Grameen Bank board.
In a statement yesterday, Prof Yunus expressed shock over the government move and said, “I am very disheartened to see that the poor is being deprived of the ownership of the bank they run and of the power to exercise their ownership.”
President Zillur Rahman will soon issue an ordinance with the latest changes as parliament is now in recess, Cabinet Secretary M Musharraf Hossain Bhuiyan told reporters coming out of a cabinet meeting at the Secretariat.
The cabinet directed the finance ministry to inform it immediately about the salaries and benefits that Prof Yunus received during his tenure as the bank’s managing director past the retirement age of 60 and whether those facilities were in line with the bank’s rules.
Banking and financial institutions division of the ministry will do the analysis with the help of the central bank, said the cabinet secretary.
The cabinet also asked the finance ministry to find out whether Prof Yunus fetched any foreign currencies from abroad under the wage earner scheme facility “as a government official,” said the cabinet secretary.
If so, it will be known how much foreign currency he brought as a wage earner and how much was exempted from tax, he said.
The three changes that will be brought to the ordinance will allow the bank’s chairman to form a selection committee in consultation with the board. The committee will recommend a panel of three candidates for the job of managing director, said Bhuiyan.
The candidates must have expertise in the field of rural economy or finance or microfinance to qualify for the job.
“The [proposed] amendment will help get the right candidate for the job of the bank’s managing director, and this will speed up the appointment process,” said the cabinet secretary.
Under the existing rules, the board constitutes a selection committee with three to five members, which selects a candidate for the post of managing director.
The Grameen Bank Ordinance 1983 gives preference to persons having knowledge and experience in rural economy or in Grameen Bank business.
The post of the bank’s managing director fell vacant after its founder Prof Yunus resigned in May last year following his removal from the bank he set up three decades ago to take financial services to the poor.
The changes in the ordinance will only deepen suspicions among the bank’s supporters at home and abroad that the government wants to take control of the bank.
Three members, including the chairman, represent the government on the 12-member board. The remaining nine are the bank’s borrower-members, who are elected at the grassroots level representing the bank’s 83 lakh members.
The government owns only three percent of the shares of the bank, while the remaining 97 percent is owned by the bank’s members, mostly women.
In yesterday’s cabinet meeting, the prime minister and five ministers came down hard on Prof Yunus.
The ministers, who took part in the discussion on the Nobel laureate, are Finance Minister AMA Muhith, Agriculture Minister Matia Chowdhury, Law Minister Shafique Ahmed, Textiles and Jute Minister Abdul Latif Siddique and Foreign Minister Dipu Moni, cabinet sources told The Daily Star.
The prime minister alleged that Prof Yunus had been constantly lobbying against the government both at home and abroad though her previous government helped him launch Grameenphone and gave many facilities.
“Now it seems that he has become our enemy,” a minister, who attended the meeting, quoted Hasina as saying.
The prime minister said her government would take steps to run the Grameen Bank smoothly, according to cabinet sources.
One of the ministers suggested including more tough provisions in the Grameen Bank Ordinance to take absolute control of the bank.
In response, the finance minister said Bangladesh is not an “isolated island”. He suggested that the cabinet take into consideration the global opinion on the bank. He said the bank’s performance was better in the fiscal year 2011-12.
The prime minister then said the government had no role in removing Prof Yunus from the post of the bank’s managing director. Rather, it was him who went to the court and had to quit the job after losing the legal battle.

Courtesy of The Daily Star

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Autonomy curbed

Admin — Thu, 02 Aug 2012 20:37:58 +0000

4 leading personalities censure govt move
Civil society leaders yesterday condemned the government move to curtail the autonomy of the Nobel winning Grameen Bank as an undemocratic decision that they believe would give negative signals to the world.
The cabinet approved of an amendment to the Grameen Bank Ordinance 1983, which would reduce the power of GB board, giving more authority to the chairman to choose its new managing director.
“It is a move in the wrong direction and is unlikely to help preserve the autonomy and integrity of Grameen Bank,” said Prof Wahiduddin Mahmud, a noted economist.
The success of the microcredit organisation came mostly because of its unique institutional structure, he said, adding the bank is created and empowered by a government statute and yet its management and board can function autonomously within its statutory provisions.
The government should ensure that those statutory provisions are not violated, the economist said. He, however, said he believed the proposed changes were aimed at concentrating power at the government-appointed chairman to an extent that is beyond the norm of any corporate culture.
The move would most likely change the basic character of the institution, undermining the authority of the board in which over eight million members have majority representation, said Prof Mahmud.
The government has become hostile towards Nobel laureate Prof Muhammad Yunus, civil society members said, referring to the cabinet’s order to the finance ministry to carry out an investigation into the facilities he had taken as managing director of the GB since he had passed the retirement age of 60 until his resignation in May last year.
The GB members should have given the authority to run their organisation, said Akbar Ali Khan, a former adviser to caretaker government. Nearly 97 percent shares of GB are owned by its members.
Akbar described the government move as “nationalisation of GB” that would hamper the interests of the members.
Also a former cabinet and finance secretary, Akbar said the cabinet rarely dealt with such issues.
“The country’s impression outside the world will seriously be affected,” he noted.
Hafizuddin Khan, another former adviser of caretaker government, said the government’s move to take control over the GB board was motivated.
“The board should enjoy the authority to run the Nobel winning microcredit organisation,” he said.
Hafizuddin, a member of the Trustee Board of Transparency International Bangladesh, also criticised the government’s decision to probe the issues involving Prof Yunus during his extended period in the bank.
“It is to harass him [Yunus],” he said, giving an opinion similar to that of Akbar Ali Khan that those issues were not supposed to be discussed at the cabinet meeting.
With the latest move, the government proved that it wants full control over GB, said Hossain Zillur Rahman, executive chairman of Power and Participation Research Centre.
Zillur, another former adviser of caretaker government, said the government had claimed that GB was a state-owned organisation, but its move to take control of it proved that their previous argument was wrong.
The government speak of public-private partnership, but its decision about GB and Prof Yunus would discourage the private sector to work with it.
“It will create a crisis of trust in future economic initiatives in partnership with the government. It is setting a bad precedent in economic partnership in Bangladesh,” Zillur said.
He said he hoped the government would have second thoughts before implementing its decision.

Courtesy of The Daily Star

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Save the bank

Admin — Thu, 02 Aug 2012 20:35:25 +0000

Appeals shocked Nobel hero
Shocked. Speechless.
This is what Nobel Laureate Professor Muhammad Yunus said after the government empowered the Grameen Bank chairman in choosing a managing director for the microlender.
Here is the statement of the Grameen Bank founder:
“I had always expressed this apprehension. Now my apprehension has started to translate into a reality. I am extremely sorry that we could not be successful in forestalling this process. I am very disheartened to see that the poor is being deprived of the ownership of the bank they run and of the power to exercise their ownership.”
“I am so dejected that I have become unable to express my feelings. I am requesting the people of Bangladesh who are feeling dejected like me to tell the government that a big mistake is being done and the government should abstain itself from doing it.”
“This government decision will destroy the bank of the poor and the country’s bank of pride. I request the countrymen to come forward to protect the property of the poor and the country. I also request the poor owners of Grameen Bank to urge the government and their fellow countrymen so that they do not curb their rights to exercise ownership.”

Courtesy of The Daily Star

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Yunus banks on youths

Admin — Sun, 19 Feb 2012 15:55:28 +0000

Says they will change politics
Prof Muhammad Yunus yesterday called for an alternative political stream in the country, saying politicians were failing to fulfil the aspirations of the people.
He said frustration over politics was deepening among the people. “People are not satisfied with the politicians. So, politics has to be pursued in new ways. Alternative political stream has to be introduced,” said the microcredit pioneer.
The Nobel laureate’s observations came at a get-together of development activists at the Gonoshasthaya Kendra in Savar.
Forty NGOs have organised the three-day event to mark 40 years of the nation’s independence and the anniversary of Gonoshasthaya Kendra (Peoples Health Centre). On the first day yesterday, they accorded a reception to 40 distinguished individuals for their contributions to the Liberation War.
Yunus, founder of Grameen Bank, also shed light on the achievements from the Liberation War and the current situation.
He said, “Before 1971, all our potentials had been trapped under a cloak. The war blew off that cloak. And it did not happen on anyone’s orders.
“After 40 years of independence, similar cloaks seem to have ensnared our potential for the coming days. The younger generation must remove the cloaks and tap the potential.”
Yunus said, “The current stream of politics will come to an end in the next 20 years. I can guarantee it. The country will change automatically if the youths stand straight with their full inner vigour. They will have to lead the new stream.”
Dr Zafrullah Chowdhury, executive director of Gonoshasthaya Kendra, said, “Muhammad Yunus too has responsibilities in changing the country’s politics in future. Calling upon the younger generations is not enough; he [Yunus] has to lead. I will stand by him in his efforts toward change.”
He urged the prime minister to take steps so that the Indian Border Security Force stops border killings in the next two years. “Realise a fair share of the Teesta waters and ensure healthcare for the people. You will be able to win the Nobel prize within two years.”
Hossain Zillur Rahman, former adviser to a caretaker government, moderated the programme.
Brac chairman Fazle Hasan Abed, who was earlier scheduled to attend the open discussion on “Achievements of 40 Years of Independence, Challenges and Possibilities”, stayed away due to illness.
Taking part in the discussion, Prof Yunus said, “Although a lot has been achieved in 40 years of independence, still many things have remained unachieved. The dreams behind our joining the war of independence have largely faded away.”
Emphasising the formation of Gram Sarkar in order to take Bangladesh forward in the next 10 years, Yunus said the local government system has been turned into a farce. “Bangladesh will move ahead a long way in 10-20 years by making the local government system powerful,” he said.
Comparing the administrative structure to a car, he said the administration functions as per instructions of the politicians. “But the administration can’t perform properly as politics has come into the administration. Politics is now also among university teachers and we are being stopped and interfered with everywhere due to weak politics.”
At the beginning of the discussion, Hossain Zillur Rahman said that the largest achievement of the liberation war was the revolution of the personality.
He said there are many drivers behind the revolution of independence of Bangladesh, prominent among them are people like Muhammad Yunus, Fazle Hasan Abed and Zafrullah Chowdhury. They have contributed a lot in social and economic achievements, but not in the political arena.
Hossain Zillur said the 40 years of independence were the first round. Terming the next 10 years the second round, he said, “Many thought we would say something about it today. They have got some hints from the speech of Prof Yunus.”
Those given reception included barrister Amir-Ul Islam, Maj (retd) Hafiz Uddin Ahmed, Shamsher Mobin Chowdhury, Shahidullah Khan, Kader Siddiqui, ASM Abdur Rob, Kazi Kamruzzaman, Shefali Bhoumik, Maj Gen (retd) Amin Ahmed Chowdhury and Maj Gen (retd) Mainuddin.
Leaders of Awami League, BNP, Jatiya Party, Gono Forum, Workers Party of Bangladesh, Jatiya Samajtantrik Jote, Bikalpadhara and Communist Party of Bangladesh are scheduled to take part in an open discussion at the re-union today.
Also today, Biranganas will be accorded a reception.

-With The Daily Star input

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Let poor prove their ability

Admin — Sun, 13 Nov 2011 12:42:52 +0000

Prof Yunus tells Vienna Social Business Summit
Nobel laureate Prof Muhammad Yunus yesterday said the poor people of Bangladesh were like Bonsai, who have been stunted by oppression. But they have the ability to grow if they are given the opportunity.
He was addressing the concluding session of the third Global Social Business Summit, hosted by Germany-based Grameen Creative Lab at the Congress Centre in the capital of Austria.
Prof Yunus said the government’s job in a country is like that of the conductor of an orchestra. It will not play all the instruments alone, rather it will work with all.
But the governments in many countries are not following this. Instead, they are creating obstacles.
The government needs to decide what to do and what not to in ensuring that the orchestra plays well and produces great music, he added.
Over 800 representatives, including ministers from different countries, joined the conference.
Laszlo Andor, the European Union’s commissioner for employment, social affairs and inclusion, said the EU has included social business in its activities. It has also officially accepted the social business initiative and social responsibility.
At the event, it was announced that the EU would hold a conference on social business on Friday in Brussels.
Prof Yunus will deliver the keynote address at the conference. British Prime Minister David Cameron, Polish Prime Minister Donald Tusk, Greek Prime Minister Lucas Papademos, European Commission President Jose Manuel Barroso and World Bank President Robert Zoellick will also attend the meeting.

-With The Daily Star input

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Another world order at play

Admin — Thu, 30 Jun 2011 05:25:56 +0000

A social business is a non-loss and non-dividend company where investors can recoup their dividend but nothing beyond that. All profits will be used to improve the products and services, and/or to increase the company’s reach.
Social business campaigners and experts from 15 countries joined Prof Muhammad Yunus in Dhaka on Tuesday to mark Social Business Day for the second time, sharing experiences of the fast-spreading movement and seeding the new economic idea among students and young entrepreneurs for solving some of the world’s most pressing needs.
Thomas Stelzer is the assistant secretary-general of the United Nations for policy coordination and inter-agency affairs. He also works closely with UN Secretary General Ban Ki-moon on millennium development goals. In an exclusive interview with The Daily Star in Dhaka on Tuesday, Stelzer talked about what he learnt from the Social Business Day celebrations. He also focused on the challenges that lie ahead for achieving MDGs and how social business can complement other efforts in reaching the goals. Here is what he said.
Social business is one of the economic theories, which is achieving a breakthrough — acceptability. People will invest in social business more and more — with a clear purpose. People will know why they are investing in it, which is a departure from the usual way of investment.
In conventional investment, you have a shareholding value, returns and income, whereas in social business you don’t have all of that and you have to conceptualise why you are investing. In social business, the vital question will be about qualitative, not quantitative growth.
People do things they are satisfied with and invest for different reasons. For many, it is a game and sport and they always think how they can maximise the outcome of their investments. What is the reason for putting $15-20 billion in your account?
But in social business, things change. A social business investor looks for satisfaction, but you draw your satisfaction differently, not by accumulating wealth, but by investing the energy of your life in a way that makes you feel good. It is an altruistic, socially-oriented understanding of how you can contribute to today’s economy.
I think social business decisively contribute to advancing MDGs. Achieving MDGs through social business alone will be a bit narrow. But I am convinced that social business very strongly influences the acceleration of implementation.
We at the United Nations look at what works. MDGs are at the core of our work. So we look into every possibility of implementing MDGs. Social business seems to be a good option to complement many other efforts. This is how I look at it. So we are not in the business of choosing one over the other. Social business seems to work in this context.
Nobody is expected to sell his company and invest in social business. But I think it is very feasible to put part of their investment portfolio in social business for different reasons.
The conference in Bangladesh [on Social Business Day] had many participants from around the world, which shows there are a lot of interests in it.
But social business has not yet been mainstreamed in the United Nations thinking. I didn’t really see it was mentioned that much. It is there, but it is not very deeply rooted. Good things take time as we say. In this context — at Tuesday’s social business event, we saw quite a lot of good examples that give evidence that social business works and can work. This is the message I am taking over from the event.

-With The Daily Star input

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Social business will change society: Yunus

Admin — Wed, 29 Jun 2011 12:45:50 +0000

The second annual Social Business Day was observed on Tuesday in the capital to celebrate Nobel laureate Prof Muhammad Yunus’s concept of social business and its implementation.
Prof Yunus opened the daylong events held at Hotel Sonargaon marking the day.
Inaugurating the events, he elaborated the role of social business in the country towards achieving the Millennium Development Goals (MDGs).
“Social business is totally dedicated to social objectives aimed at finding solutions to social problems and committed to serving the interests of people without incurring losses. And I do hope this businesses will change our society through a new kind of global business”, Prof Yunus said.
Yunus also detailed how the concept of Social Business is gaining interest beyond the national boundary.
“I met Brazilian President Dilma Rousseff last month, and she showed keen interest in the new concept to be adopted in Barzil”, he said.
Around 400 participants from 15 countries including Bangladesh, Austria, Brazil, Costa Rica, France, Germany, Hong Kong, India and the United Kingdom attended the events. “Achieving the Millennium Development Goals through Social Business” was the theme set for the day in order to highlight the visionary global actions focusing on eradicating poverty. Some 20 stalls have been set up by social business organizations to showcase their products.
The exhibition saw a packed room and visitors were curious to check out various products of Social Business institutions ranging from children and women garments, Nokia handset, solar panel unit, energy saving lamps, seeds, Bonsai trees.
Mafijur Rahman, a student of Dhaka University, told this correspondent that he himself was keen to initiate social business at his hometown Dinajpur, so he was visiting this exhibition.
During the opening session of the Day, BSAF Asia Pacific Regional Functions and Country Management president Saori Duborg, Veolia Water CEO Eric Lesueur, Grameen Danone executive director Corinne Bazina and officials from various Grameen organizations spoke sharing their experiences in developing social businesses.
This was followed by a panel discussion moderated by North South University Business School Dean Prof Abdul Hannan Chowdhury. UN Policy Coordination and Inter-Agency Affairs Assistant Secretary-General Thomas Stelzer and President of Bangladesh Federation of Women Entrepreneurs Rokea Rahman, among others, attended the session.
The afternoon session was exclusively for faculty and students of participating 20 Bangladeshi institutions and 20 Indian business, schools who have taken part through video link. Prof Yunus answered questions from the students at the session.

-With The News Today input

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Yunus worried about GB future

Admin — Thu, 26 May 2011 10:37:18 +0000

Tells The Daily Star it’s not wise to amend law to ensure govt control
Nobel laureate Muhammad Yunus has warned that Grameen Bank could run into deep trouble if the government amends the law to take control of the microfinance bank founded by him.
“If those amendments [proposed by the review committee] come and the government penetrates the bank, it will not survive very long,” Prof Yunus said in an exclusive interview with The Daily Star, the first after his resignation from Grameen Bank as managing director this month.
“I’m anxious about its safety,” he said.
Yunus said there should not be any attempt to amend the 1983 ordinance that governs the microfinance bank unless it is recommended by the board.
A government-appointed review committee has recently suggested amendments to the Grameen Bank ordinance, even though it found no financial irregularities in the operation of the bank.
Yunus’ comments underline a common concern that Grameen Bank would flounder without Yunus at the helm.
His resignation came after he lost final appeals in the Supreme Court against his dismissal by Bangladesh Bank citing violation of the bank’s retirement rules.
The government should listen to the demands of its 83 lakh borrowers who effectively own 96.5 percent of the Nobel Peace Prize-winning organisation if it really wants to change the ordinance, Yunus said.
During the interview, the 70-year-old banker to the poor contested a series of misconceptions about the organisation he established three decades ago.
“Some think that Prof Yunus owns this bank and is earning a lot of money out of it. I say no, I do not own a single share in the bank. I am just an employee.”
Prof Yunus rubbished the government’s claim that Grameen is a government bank.
“To call it a government bank, it has to be owned by the government as the majority shareholder. Even in private banks, the government may have some shares. It does not make a private bank a government bank,” he said.
Yunus criticised the review committee for not visiting the Grameen Bank headquarters or meeting its staff or members before making such a report.
“During the review, the committee members did not visit Grameen Bank. They did not visit branches of Grameen Bank to see what Grameen Bank is. They did not meet the borrowers of Grameen Bank. Maybe some of them individually met some borrowers in the past,” Yunus said.
“They did not talk to the staff of Grameen Bank. The committee talked to me for an hour when I went to them and answered a few questions. Additionally, they talked to the deputy managing director for a few minutes,” he said.
Yunus said the committee members had preconceived notions and perceptions about the bank.
“Based on their perceptions they made the recommendations. It was very unkind to give such a big task to them. It is extremely unkind for Grameen Bank to receive those recommendations. After all, we should not take Grameen Bank so lightly.”
The microfinance pioneer said the committee has insulted the board by branding it as a rubber-stamp body. “The nine directors sitting on the board are elected in a four-tier process. Each of them has to be an outstanding person.”

Read Exclusive Interview of Professor Yunus

Courtesy of The Daily Star

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Do not let go of GB ownership

Admin — Wed, 18 May 2011 04:36:45 +0000

Prof Yunus writes to members
Nobel Laureate Professor Muhammad Yunus yesterday urged the 83 lakh members of Grameen Bank to remain vigilant against any attempts to take away the microfinance bank from the majority shareholders.
The caution came after his resignation as the bank’s managing director amid widespread speculation that his removal was part of a coordinated government ploy to take the full control of the bank.
“Grameen Bank is a priceless wealth for you. Do not give away this to anyone. You are the owners of this bank. Do not let go of this ownership,” Dr Yunus said in a letter addressed to the bank members.
“If anyone speaks about taking away the ownership of Grameen Bank, if anyone speaks against your bank, then you must protest against it…. If you remain silent, the bank will be taken away from your possession,” he said.
In papers, the government controls 25 percent shares while 75 percent belongs to the borrowers, the majority of them are rural women. However, the government now effectively has only 3.29 percent share in terms of paid-up capital and the borrowers own the rest.
Yunus said the members of the microcredit agency are set to face tough time following his departure from the bank he founded three decades ago.
“Soon you will be put under difficult tests. You must prepare yourself from now on to come out successfully from these tests. If you are able to protect this bank, then your children and descendants will be benefited from its wealth.”
In the letter, the microfinance pioneer described how he embarked on one of the greatest economic innovations of the 20th century 35 years ago.
“Thirty-five years ago, I did not know that I would start a bank, and that I would lend to poor people, especially to poor rural women. Like many other teachers, I was busy teaching in the classroom, far from the realities on the ground. But Jobra village took my future completely into a different direction.”
“I saw, first hand, how the loan sharks enslaved the villagers; I thought that if I were to lend money to the poor, then the villagers could be free from the grasp of the loan sharks. That is what I did. I never imagined that this would become my calling in life.”
The “Banker to the Poor” thanked women members of the bank for successfully overcoming tough challenges to make the Grameen Bank a success story.
“A lot of people from the villages resisted your joining Grameen Bank. They were opposed to seeing women handle money and earn. They tried to frighten you by telling you about the horrifying outcomes of accepting money from Grameen Bank.”
“They said this was a missionary bank whose purpose was to convert you. They threatened to attack you; they threatened that they would bury you wrapped in black shroud when you died; they would not have a burial prayer for you. They threatened to chase you from your homes. And many of you were chased out of your homes and your villages.”
“But you did not get frightened. You became united… You vowed that you would bring prosperity to your families. That is why from the Grameen Bank Project, you managed to create Grameen Bank and became its owners.”
In 2006, Yunus and Grameen Bank jointly won the Nobel Peace Prize “for their efforts to create economic and social development from below”.
“Grameen Bank, in other words you, won the Nobel Peace Prize. You brought the nation a very big honour. Those who had earlier been chased out of their villages now had brought this great honour for the nation,” said Prof Yunus.
“The entire nation felt proud of you….you will always keep your heads raised high. You will never bow your heads to anyone — this pledge has become a part of each and every one of you.”
On March 2, Bangladesh Bank through a letter removed Yunus from the post of managing director, on claims that he was holding on to his post way past his retirement age.
The central bank move triggered a legal battle but Prof Yunus lost in courts.
On May 12, he resigned from the bank “to prevent undue disruption in the activities of the micro finance institution”.

Courtesy of The Daily Star

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Govt plans to overhaul GB

Admin — Wed, 18 May 2011 04:29:28 +0000

14-pt blueprint to raise govt stake in Grameen Bank
The government has planned to raise its stake in the Grameen Bank and establish control over its lucrative sister firms in a move that will transform the Nobel winning micro-lender into another state-owned bank.
The finance ministry has outlined the plan in a 14-point blueprint, which follows the controversial sacking of the Nobel Peace Prize winner Professor Muhammad Yunus from the micro-lender he founded in 1983.
The US-trained former economics professor was fired from the Grameen Bank on March 2 — a move he challenged futilely for the last two months in the country’s highest court.
The central bank removed Yunus, 70, citing he was illegally holding the position of the managing director, as he has crossed Grameen Bank’s mandatory retirement age of 60 years more than a decade ago.
Finance ministry officials said the blueprint has been prepared in line with the recent recommendations made by a government-appointed review committee on Grameen Bank and its sister companies.
The review body, whose findings were released last week, has said the GB under Yunus “flouted rules and laws consistently” since its inception, particularly in the creation of its sister organisations, known as social business enterprises.
“We have planned sweeping reforms for both the Grameen Bank and its sister organizations. They will be implemented in phases very soon,” a top official of the ministry of finance told the FE.
Two high-powered government committees will be formed to execute the blueprint, particularly for overhauling bank’s operational independence and establishing its ownership over the 34 sister firms, he said.
He said the creation of the sister organisations under the GB Ordinance have spawned “numerous legal loopholes and organisational weaknesses”, paving the way for massive irregularities.
The sister companies were established by the Grameen Bank created venture capital firms Grameen Kallyan and Grameen Fund. Both the firms were set up in 1996 by amending the GB Ordinance, 1983.
Yunus has said the Grameen Bank don’t own the sister organisations including the Grameenphone, whose 34 per cent stake is owned by Grameen Telecom, a social business enterprise created by GB-allied venture capital firm.
According to the review committee, that 34 per cent stake is now worth Tk80 billion or 1.25 billion dollars. Other GB sister firms like Grameen Knitwear, Grameen Shakti or Grameen Danone dairy are also rich companies.
Finance ministry officials said the government would change the existing Grameen Bank laws so as to establish Grameen Bank’s “full control” over the social business enterprises — some of which are joint ventures with top global companies.
“The 1983 Grameen Bank Ordinance has to be changed and corrected to resolve the legal, managerial, controlling and financial problems of the Grameen Bank and its sister organizations,” the first of the 14-points blueprint reads.
Under the plan — a copy of which was seen by the FE — the government would change the statutes that led to the creation of the micro-lender, which now lends some Tk10 billion a month to about eight million rural borrowers.
It said the government would establish a regulatory authority for the Grameen Bank and “actively consider” bringing the lender under the direct supervision of the Bangladesh Bank.
Under the blueprint, the government would raise its stake in GB from the current 25 per cent although Yunus has steadfastly maintained that the Bangladesh government’s stake has declined to less than 3.5 per cent.
According to Yunus, the government stake has declined gradually with the infusion of capital from growing number of borrowers. By virtue of the 1983 ordinance, a borrower becomes Grameen Bank owner automatically.
Officials said the board of directors of Grameen will be reconstituted with induction of experienced professionals with expertise in economics, banking and micro-credit operation.
The directors — both sponsor and nominated — must qualify a Bangladesh Bank formulated “fit and proper test”.
Presently, the GB board comprises 12 members including nine directors who are directly elected through votes by the Grameen Bank borrowers. The rest three including the chairman are appointed by the government.
“The similar clause of Bank Company Act, 1991, which is applicable to all commercial and state-owned banks for appointing bank directors, will be applied to GB,” a top finance ministry official said.
The paid-up and authorised capital of bank will be raised substantially from the existing Tk 3.50 billion and, Tk 547 million. “The aim is to help the bank face any liquidity or any other crisis,” said the official.
Officials said the GB Ordinance will be amended so that prior permission of BB becomes mandatory to give effect to any regulation of the micro-lender.
Presently, board of directors of Grameen, according to GB Ordinance, is empowered to formulate regulations for the bank, which does not need any prior or post approval from the central bank.
The government has also planned to impose tax at source on the income generated from the bank’s deposit, like other commercial banks. The National Board of Revenue will issue an order in this connection soon after the approval from the Prime Minister, said a source.
The Review Committee on GB submitted its report on April 25, this year. It put forward 27-point recommendation to revamp the Grameen Bank.
Yunus’s supporters at home and abroad have protested the Nobel laureate’s removal, saying the economist paid heavy price due to his brief entry into politics during the caretaker government in 2007.

Courtesy of The Financial Express

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