BB backs GB review committee report

Syful Islam | Published: January 09, 2014 00:00:00 | Updated: November 30, 2024 06:01:00

The Bangladesh Bank (BB) has backed the Grameen Bank (GB) review committee report suggesting the government to ask the micro-lender to comply with the recommendations made in it, sources said.
The BB's suggestion came recently as the Ministry of Finance (MoF) sought its opinion on a number of clauses of the report.
The review committee suggested that in future, if the GB stood as a guarantor of any institution taking loan from other banks or leasing institutions, a summary containing important points of the audited report be placed before the board of directors while presenting its annual account.
It also suggested that from now on, the institutions, formed with approval of the GB board, submit a detailed report on their activities every year on a regular basis to the meeting of the board of directors for information.
Besides, the review committee suggested that the sister concerns of GB, limited by guarantee of bank directors, could be made limited by shares of the directors. It also suggested making immediate repayment of loans taken by sister concerns against the guarantee given by the GB.
The BB in its opinion said the managing director and the chairman of GB can be asked to comply with the review committee report and remove the existing inconsistencies.Â Â
The review committee in its report also said the Packages Corporation is an institution owned by the family of Dr Muhammad Yunus. It was given Tk 96.6 million loan from the Social Venture Capital Fund (SVCF) of the GB during the 1990-2005 period. In 2006, the GB waived Tk 0.137 million out of Tk 0.144 million the Packages Corporation owed to the bank as interest.
The waiver of interest actually caused financial loss of Tk 8.95 million to the GB as principal amount of the loan. This went against the interest of the shareholders of the bank.
The BB, referring to the relevant policy said scheduled banks can waive only interest of loans, not the principal amount. Since the GB is a non-scheduled bank, legal opinion can be sought to provide necessary directive to the bank.
According to the review committee investigation, the Packages Corporation was charged only 5.0 per cent interest instead of 16 per cent against the loan it took from the GB.