Govt moves to pick 'educated' directors

The government plans to amend electoral rules of Grameen Bank to pick “competent and educated” directors for the lender, where members generally elect nine borrower-directors from among rural women.
Analysts say the move goes against the spirit of the Nobel winning microlender, which supports the very poor people and is owned by the poor, rural women.
The finance ministry on Tuesday formed a two-member committee to draft the rules within a month.
The new development came days after Finance Minister AMA Muhith termed the electoral system of the lender undemocratic and unauthorised.
At the bank, the nine women directors are elected for three years from among the borrowers, while the government nominates the rest three directors, including the chairman, to the 12-member board.
Muhith said the government planed to amend election rules to phase out the current board, including the nine women directors.
Last year, the government formed the Grameen Bank Commission to review the activities of the bank and 54 other organisations that bear the word "Grameen" in their names.
The commission was asked to make recommendations on how to run the organisations.
The commission in its interim report said the nine women directors of Grameen Bank were not "qualified and educated" enough to be on the board.
The commission suggests the directors should have a certificate from a government-recognised school or madrasa, endorsing that the person has passed the equivalent of Class 7 so they can read and understand the proceedings of the board.
Akbar Ali Khan, former adviser to a caretaker government, said: "These borrower-directors are elected representatives. If we are not respectful to these elected representatives, then questions could be raised in many other areas.
"Even, we can raise questions about the qualifications of the lawmakers and ministers," he said, adding that there were many factory owners and industrialists who were not highly educated.
"I think we should be respectful to democratic values," said Khan, who was the chairman of Grameen Bank for around three years until 1996.
Khan said in state-run banks the government had scrutinised the director selection process in an excessively careful manner, but the banks were in dire straits now.
"So, there is no way to think that any government intervention will improve the situation in any bank."
"The government is doing all these to destroy the bank," Khan said.
AB Mirza Azizul Islam, another former adviser to a caretaker government, also finds no reason why there should be any educational benchmark for these directors.
He said the government planed to introduce a system in a country where people's representatives, including lawmakers or union parishad chairmen, did not have to match any certain level of educational qualifications.
Islam said: "Even in case of listed companies, it is not stipulated that a certain director candidate will have to have certain educational qualifications."
Prof Muhammad Yunus, the founder of Grameen Bank, told The Guardian in December last year: "I find it outrageous that people are calling into question the qualifications of these women who have become owners of the bank with their own money."
In another interview with the New York Times published on Wednesday, the Nobel laureate said: "If the government suddenly starts to implement the recommendations [of the commission], it will cause fundamental damage to the institution."
The government now owns 3.29 percent of the bank based on equity, while the rest 96.71 percent shares are held by the bank's members.