Govt set to appoint BoD members

The government is set to appoint members of the board of directors (BoD) of the Palli Sanchay Bank (PSB) to intensify poverty alleviation efforts through various income-generating activities, a high official of the ministry of finance (MoF) said.  
"We are going to appoint members of BoD of the bank soon," additional secretary of Bank and Financial Institutions Division Gokul Chandra Das told the FE.
The Jatiya Sangsad enacted the PSB law in July, giving authority to the government for setting up the specialised bank for poverty alleviation.
Under the Palli Sanchay Act 2014, the new bank will emerge from the government's 'One House, One Farm Project'. Under the project, a total of 35,500 societies have already been formed across the country.
The government will hold 51 per cent shares of the bank, and the rest 49 per cent will be owned by the member cooperative societies.
The law mentioned that the authorised capital of the bank will be Tk 10 billion, divided into 100 million (10 crore) shares at a value of Tk 100 each. The paid-up capital of the bank will be Tk 2.0 billion. The cooperative societies' estimated total fund of Tk 13.42 billion will be transferred to the new bank. The government can raise the bank's paid-up and authorised capitals through gazette notification. The government will not take any dividend against its shares.
PSB will not be governed under the Banking Companies Act. But like Grameen Bank, it will have to submit reports as per the requirements of the Bangladesh Bank (BB). The audited reports of the bank must be presented to the government and BB at the end of each financial year.
PSB's board of directors will consist of 18 members, and the chairman will be selected by the government from these members.
Of the total, seven directors will be selected from the shareholders from the division-level associations of 'One House, One Farm Project'.
The remaining 11 posts will include: a representative from the finance division, a member of the rural development and cooperatives division, director general (DG) of Bangladesh Academy for Rural Development (BARD), and the bank's managing director.
Besides, a representative from the legislative and parliamentary affairs division, two upazila chairmen selected by the government, and four experts on rural economy and micro-finance will also be present in the board.
The tenure of the board will be three years. One director can be appointed for maximum two consecutive terms.
The activities of PSB will be like Grameen Bank. It will collect deposit and lend to its members. The bank will provide small loans for poverty alleviation and for developing the habit of saving among the rural poor.
The micro-credit borrowers will not need to submit any collateral to get loan from the bank. But they will have to provide collateral, if they are interested in getting loan more than the stipulated amount of money.
If any borrower uses false information for getting loan from the bank, s/he will get one-year imprisonment or a fine of Tk 50,000 or both.
The head-office of the bank will be set up in the capital. There is provision in the law that the bank can set up regional offices and branches across the country, following approval of the central bank.
Mr Das said the people who are now working with the 'One House One Farm Project' will be absorbed by PSB.