The government has strengthened its hold over Grameen Bank, amending the rules to give itself the authority to appoint board members for the microlender.
As per a notification from the banking and financial institution division on Monday, the government will now form a three-member committee to elect nine members of the 12-member board -- and not the central bank, who objected to the additional responsibility.
The amended rules said the three-member body 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, an executive director of Bangladesh Bank was supposed to fill in as the chief election commissioner. The other two posts would be occupied by one of the general managers of Grameen Bank and a director of the Microcredit Regulatory Authority. The government's latest move did not go down well with the incumbent Grameen Bank board.
Tahsina Khatun, a director of the microcredit institution and also the spokesperson for the nine directly elected directors, said there was no need to change the Grameen Bank laws at all.
The government has amended the rules without consulting the majority shareholders of the bank, she said.
“Only the government knows what good lies in the change. This will only politicise the organisation -- something that we have been able to avert for so long.”
Khatun also expressed her surprise over the inclusion of a provision in the Grameen Bank (Election of Directors) Rules 2014 which says a deputy managing director of a state-run commercial bank will act as one of the two election commissioners during the poll.
“Elections of a bank overseen by officials of another bank -- there is no precedent for this, nowhere in the world.”
Meanwhile, finance ministry officials said the banking division will appoint the election commissioners after consulting the finance minister.
The amended rule also changed the timeframe for electing the board of directors: it will now be 12 months from the date of formation of the election commission as opposed to six months from the activation of the rules. It also states that officials of any state-owned commercial bank can function as the returning officer and presiding officer for the elections.
As per the original rule, the Grameen Bank board picked an official of the bank to conduct the elections. Apart from these, all other rules have remained unchanged.
Meanwhile, the Grameen Bank board has appointed ASM Mohiuddin as the acting managing director after Mohammad Shahjahan went on leave preparatory to retirement last week.
Mohiuddin, who has been involved with Grameen Bank since 1982, when the bank was still running as a project, has recently been promoted to the position of deputy managing director from general manager for administration.