Specialised bank like Grameen close to reality
The government's plan to set up a specialised bank for the rural poor along the lines of Grameen Bank is gathering momentum, as the finance ministry looks set to place the draft of the Palli Sanchay Bank Act at a cabinet meeting Monday.
The draft act, prepared by Rural Development and Cooperatives Division, was finalised yesterday at a meeting chaired by Finance Minister AMA Muhith and attended by Bangladesh Bank Governor Atiur Rahman, high officials of finance ministry's banking division and LGRD and co-operatives ministry.
“We are aiming to get the draft passed in the current session of the parliament,” Muhith told reporters after the meeting.
The new bank will emerge from the government's “One House, One Farm” project, just like Grameen Bank was born in 1983 following the conversion of Chittagong University's Yunus-led Grameen Bank project.
Asked if the bank was being set up with the intention of providing an alternative to Grameen Bank, Muhith said: “That's rubbish – but it is true that it [Palli Sanchay Bank] was inspired from Grameen Bank's experience. However, its main objective is to encourage rural people to save.”
The government will hold 51 percent of the bank's ownership and the remaining 49 percent would go to the 17,300 member cooperative societies of the “One House One Farm” project. However, the government will not take any dividends against its shares.
The draft law said the bank's paid-up capital would be Tk 600 crore, 80 percent of which will be provided by the government through its “One House, One Farm” project. But in yesterday's meeting, it was revised down to Tk 200 crore and an authorised capital of Tk 1,000 crore was proposed.
The cooperative societies' total fund of Tk 1,342 crore would be transferred to the new bank.
Palli Sanchay Bank will not be governed under the Banking Companies Act, meaning it would remain mostly out of bounds of the central bank. But like Grameen Bank, it would have to submit reports as per Bangladesh Bank's demands.
The bank's board of directors will consist of 15 members and the secretary of the Rural Development and Cooperatives Division will be its ex-officio chairman.
Seven directors will be selected from the shareholders, with the government appointing the other eight. The managing director can be appointed from the board or from outside of it and he/she would be allowed to serve in the position until 65 years of age, in contrast to maximum age of 60 for Grameen Bank MDs.
The activities of the specialised bank, in many aspects, would also resemble those of Grameen Bank. Like Grameen Bank, it will collect deposits and lend to its members.
The bank will provide small loans with the aim to alleviate poverty and get the rural poor into the habit of saving.
But Palli Sanchay Bank will differ from Grameen Bank in that it would also conduct general banking activities for its members.
The “One House, One Farm” is a project under the Annual Development Programme, the first phase of which started in 1997. The second phase of the project started after the present government assumed power.
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