Yunus’s Grameen Bank to have authority cut
The government plans to amend the Grameen Bank Ordinance 1983 to reduce the powers of the bank’s board and give more authority to its chairman to pick the managing director of the microcredit organisation.
The finance ministry may place a proposal before the cabinet division today for bringing about changes to Section 14 of the ordinance that governs the Nobel peace prize winning organisation, said a ministry official yesterday on condition of anonymity.
If the proposal gets through, it will cut the Grameen Bank board’s authority to choose the managing director and give almost absolute authority to the chairman, who is always picked by the government, to select the bank’s chief executive.
Under the proposal, the chairman will constitute a committee with three to five members to search for candidates for the post of the bank’s managing director. The committee will shortlist three candidates.
The chairman will then choose one from among the three candidates and place his or her name before the board for approval. Once the board approves it, the name will be sent to the central bank for approval.
Under the existing rules, the board constitutes a selection committee with three to five members, which selects a candidate for the post of managing director.
The post of the bank’s managing director fell vacant after its founder Nobel laureate Prof Muhammad Yunus resigned in May last year following his removal from the bank he had set up three decades ago to take financial services to the poor.
The likely changes in the ordinance will only deepen suspicions among the bank’s supporters at home and abroad that the government wants to take control of the bank, which has some successful businesses, including Grameenphone, linked to it.
Three members, including the chairman, represent the government on the 12-member board. The remaining nine are the bank’s borrower-members, who are elected at the grassroots level representing the 83 lakh members of the microcredit organisation.
The government owns only three percent of the shares of the bank, while the remaining 97 percent is owned by the bank’s members, mostly women.
Mohammad Shahjahan is the acting managing director of the bank.