Grameen Bank now under govt supervision

By Mizan Rahman/DhakaThe Bangladesh cabinet yesterday approved the draft of the Grameen Bank Act-2013 finally bringing the Nobel prize-winning bank, founded by Professor Muhammad Yunus, under the supervision of the central Bangladesh Bank.The draft law proposes bringing change in the Grameen Bank’s capital structure, management system and other necessary regulations.The approval was given in the weekly cabinet meeting held at Bangladesh Secretariat with Prime Minister Sheikh Hasina in the chair. The meeting also endorsed seven other draft laws and one policy.Briefing reporters after the meeting, Cabinet Secretary M Mosharraf Hossain said, the draft has been made in Bangla language revising the Grameen Bank Ordinance, 1983 under which the bank was founded.“All recent amendments the government brought with regard to the Grameen Bank were incorporated in the draft,” he said. The Cabinet Secretary said, the draft law proposes raising the authorised capital of the bank to 10,000mn taka from existing 3,000mn taka while paid-up capital to 3,000mn taka from 500mn taka.Fixing the tenure of a director at three years, the draft law also proposed that the bank must submit its annual statement and income tax return to the government as well as the central Bangladesh Bank. However, the bank will continue to enjoy tax exemption on its earnings, the Cabinet Secretary noted.Mosharraf said, the bank could exercise its present periodical debt recovery (PDR) system. But, the law proposes monitoring the system so that no debtor is harassed. In case of giving any false information to allure the debtors to take loan, the Grameen Bank Act 2013 proposes one year rigorous imprisonment or 10,000 taka penalty or both.The draft law also prohibits the use of the name of Grameen Bank by anybody in any advertisement or prospectus without written permission from the bank. For violating the law, one will be jailed for one year or fined 1,00,000 taka or incur both the penalties, the law proposed.However, one of the major issues – a cap on tax exemption enjoyed by the Grameen Bank– was not covered in the law, though the period for the exemption would now be decided by the government. Talking to newsmen earlier, sources at the Bangladesh Bank said they were reluctant to take control of Grameen Bank.The Microcredit Regulatory Authority, which regulates microfinance institutions, should get the job, they said. Earlier on September 30, Finance Minister AMA Muhith said the government would pass only one more law, the Grameen Bank Act 2013, during its tenure.He said the law would be passed in the ongoing parliamentary session. However, there might not be any major changes in the structure of the microcredit bank once the new law takes effect, he added.