Govt to bring GB under regulatory framework

The government will not increase its stake in Grameen Bank, but will bring the microfinance bank under a regulatory framework under a new law, Finance Minister AMA Muhith said yesterday.
As part of formulating the new law, the banking division yesterday held an inter-ministerial meeting in the finance ministry to discuss the draft Grameen Bank Act 2013. The Act will replace the Grameen Bank Ordinance 1983.
Muhith told reporters at his secretariat office that the government would retain its 25 percent share in the bank despite recommendations from the Grameen Bank Commission to raise the stake.
"The government had 25 percent share in the bank and we are just retaining it. This is the final decision," he said.
Muhith added that the government would have to make a decision to bring Grameen Bank under a regulatory framework, as neither the central bank nor the Microcredit Regulatory Authority (MRA) now controls the microfinance bank.
"We will have to put it either under the Bangladesh Bank or the Microcredit Regulatory Authority. A provision must be kept in the new Grameen Bank Act in this regard," he said.
The inter-ministerial meeting was attended by the managing director of Grameen Bank, top officials of NGO Affairs Bureau, MRA, the registrar of the Joint Stock Companies and Firms, and representatives of the National Board of Revenue and nine ministries.
Everyone in the meeting was asked to give their opinion on the draft Act by August 25, Banking Division Secretary M Aslam Alam, who chaired the meeting, told reporters after the meeting.
The government is now working to transform the Grameen Bank Ordinance into a law along with other ordinances promulgated between 1982 and 1986 by the then military government.
At the meeting, the Grameen Bank Ordinance was placed as the draft Grameen Bank Act 2013. No changes have been made in the draft yet but it has been translated into Bangla by the Grameen Bank, officials said.
Under the new law, the authorised capital of Grameen Bank will be Tk 350 crore, divided into 3.5 crore shares of Tk 100 each.
The bank's paid-up capital will be Tk 300 crore, up from Tk 74 crore now.
In 2007-08, the caretaker government had increased the authorised and paid-up capital through an executive order, but the rise did not take effect as the Awami League-led government did not turn the changes into a law after assuming office in January 2009.
These changes will now be incorporated in the new law.
Muhith, however, did not say whether the government would take any steps upon receiving the Grameen Bank Commission report expected next week.
“The government will have to decide on it," he added.
The minister said the government did not need a majority share in Grameen Bank, as the bank was a statutory body created by the government.
“Prof Muhammad Yunus would not be able to grab it no matter how loud he shouts."
Muhith said the government also would not change the bank's current structure.
“It will function in the way it is functioning now…. But Prof Muhammad Yunus has continued campaigning against it [the commission]. What is the purpose?"
The minister also said there were no rules for electing the directors of the bank. "We will formulate rules."
The minister said the government was looking for a new chairman after Mozammel Huq, the present chairman of the bank, submitted his resignation letter on August 5 citing poor health.