The Review Committee on Grameen Bank (GB) Affairs has strongly recommended liquidation of Grameen Fund and Grameen Kalyan and amalgamation of the institutions with their parent organisation GB with all their existing assets and liabilities. The recommendations along with other such 26 specific points have been made to establish transparency and accountability with the bank, the committee report said. The report has been handed over to Finance Minister AMA Muhith Monday. The report categorically mentioned that transfer of fund from GB to Grameen Kalyan was settled on June 18, 1998. 'It seems that the allegation of fund transfer from GB to Grameen Kalyan was settled on June 18, 1998,' reads the report. However, the report said such transfer of fund was ultra vires as far as jurisdiction of GB is concerned. The report said the government has been reluctant in monitoring the activities of Grameen over the last decade. The situation of irregularities could have been averted if Bangladesh Bank had strong monitoring on GB. The report said GB has grown and developed not based on methods and regulations but depending on an individual. A national policy formulation is imperative to fine tune the activities of the bank, the report observed. The review committee strongly recommended establishing a GB Reform Commission and amending the existing GB Ordinance, 1983. It said neither BB nor Microcredit Regulatory Authority (MCRA) has strong surveillance on the activities of GB, paving the way for irregularities in the bank. The report suggested bringing the bank under the MCRA. In that case, the MCRA will deal with the appointment of the Chief Executive Officer of Grameen, it mentioned. The report suggested inclusion of the provision of mandatory permission from the government before formulating regulation for the bank, which is now enjoyed by board of directors of the bank. It said the existing number of GB's borrower directors (nine) should be trimmed to six. The three bank directors, who will be experts on rural economy, banking and micro-credit, should be appointed by the government. The maximum age-limit of GB's CEO should be 65 years, the report said. As the GB has shares worth Tk 8.0 billion in Grameenphone, the share and equity of GB has to be ensured through required legislation and thus uphold the interest of GB's members in Grameenphone, the report said. The number of associate organisations of Grameen should be reduced through merger and amalgamation and reconstitution of the board of directors of those associate organisations as Dr Muhammad Yunus is the chairman of almost all of those organisations, it said. It also said to establish an audit committee to ensure transparency of Grameen. The review committee observed that other than GB's members, individuals and institutions are also allowed to deposit money with the bank. But those depositors are also exempt from paying any excise duty and tax at source on their profits like those of GB's members. It strongly suggested imposing excise duty and tax on depositors of Grameen other than its members. The report said since the very inception of GB, it has been running without regulator resulting in growing tendency in ignoring law and regulation by the bank, despite the bank having far-reaching positive impact on country's social and economic fronts through its activities. "Under the circumstances, an effective regulator is a must for GB," the report said.
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