The recommendations made by the Grameen Bank commission are not worthy of serious consideration
The Grameen Bank Commission is going to organize a workshop at BIAM Auditorium on July 2 to discuss its recommendations for legal changes to the Grameen Bank structure. It has been announced that Finance Minister Mr AMA Muhith will deliver his valuable comments about his experience in this regard. There will be a discussion with experienced and distinguished persons of the country at the workshop, on the eight-page working paper of the commission entitled "The Future Structure of Grameen Bank: Some Options."
The working paper proposes three options:
- To restructure Grameen Bank in the form of Bangladesh Shilpa Bank as a government bank, with 51 percent or more shares in the bank being held by the government. Government would also have the majority seats on the board of directors of the bank.
- To transform Grameen Bank into 19 or smaller Grameen Banks, following the structure of the Bangladesh Rural Electrification Board. Each of the separate 19 Grameen Banks would be separately registered. There would not be any legal relationship between them. Each would have its own independent management structure. The current Grameen Bank head office will be given the responsibility of becoming the regulatory organization for this new Grameen Bank family. This apex regulatory organization will provide registration to each of these nineteen small Grameen Banks. This apex body will control and supervise all of the small Grameen Banks. It will coordinate among the small Grameen Banks family at both the national and international level. The small Grameen Banks will cover the costs of running the apex body.
- Grameen Bank may be transformed into a private company like organization, other than a cooperative or credit union. Under this option, the Commission envisages a problem in registering Grameen Bank under the Companies Act - that of holding Annual General Meetings with the huge number of Grameen Bank borrowers ( currently 8.4 million). This Annual General Meeting is an indispensable requirement of the Companies Act, and there is no way to avoid it.
What is the reason for this rush to change the law?
Grameen Bank is a unique institution created under a unique legal structure. The effectiveness of this legal structure has been successfully demonstrated over the last 30 years by the organizational efficiency and power of the bank's operations. What offense has Grameen Bank committed that it must be broken into pieces? Someone has to explain this.
The Grameen Bank Ordinance with amendments up to 2008 is a beautiful legal structure for the fulfillment of the ideals and objectives of the bank. Any change in this structure will be devastating for the bank. The amendment in 2008 included provisions to open Grameen Bank branches in urban areas and for the election of Grameen Bank chairman by its own board of directors, rather than be appointed by the government. These provisions stood cancelled as the present government did not ratify them at the start of its term.
The current legal structure has led Grameen Bank to the peak of global recognition, won it the Nobel Peace Prize, brought a ray of hope into the lives of 8.4 million women and their children, and made poor women the owners of a nationwide bank. This legal structure has been recognized, celebrated and replicated around the world. What fault has the Inquiry Commission found in this legal structure that it is now recommending to throw it into the trash can? Will the Commission kindly explain this to the nation?
Grameen Bank has been built with the funds of the poor women. How can the Inquiry Commission propose to hand over the majority shares of an organization which is owned 97 percent by private citizens to the government? This is nothing but snatching.
The people of Bangladesh know very vividly whether the bank will prosper or be doomed to failure if its ownership is given to the government and its board run by government people. People are interested to know what real objective the Inquiry Commission has in its mind in making these strange and destructive proposals.
Not only are 97 percent of the shares of Grameen Bank owned by poor women, the bulk of the bank's lending operation is financed through their own funds. These poor women have deposits of over eighty billion taka in the bank. Will the Inquiry Commission explain to the people of the country why a bank that operates with its citizens' own money surrender 51 percent or more of its shares to the government, knowing fully well that will be extremely risky, to say the least.
Some enthusiastic people must have inspired the Inquiry Commission to make such recommendations on the basis of the "grand success" of the government in managing Sonali Bank.
Please do not try to snatch the poor people's bank out of their hands. There is no reason to believe that it will be a pleasant experience for the government to engage in a char-grabbing fight with the 8.4 million poor families, by changing the law with a stroke of a pen. There should be no reason to expect that the people of the country will sit idly by and watch the organization that has brought them recognition and glory across the world be grabbed, broken into pieces and destroyed.
This Bank does not take any money from government nor from any donor organization. It is a fully independent institution. The bank is owned and managed by the poor women borrowers. It has been run very smoothly throughout its entire history under the present legal structure. Nothing has occurred so far to make it necessary to change this legal structure. There has never been raised any doubt in anyone's mind about the quality of management of the bank; rather everyone has taken pride in it. No question has ever been raised in the media. The Central Bank has never questioned the quality of the bank's management, rather it has praised it each year. The borrowers have been pleased about the way the bank is run. Now all of a sudden, the Inquiry Commission has come up with a bizarre proposal that the bank's legal structure should be replaced by a new one. But why?
Let Grameen Bank proceed on its glorious path with the existing law. If the law is replaced as proposed by the Commission, it will lead to a national disaster. Every option that the Inquiry Commission has proposed will result in disaster for the bank. We must make sure to protect this bank, keeping in mind that the fate of 40 million poor people is linked with it.
The people from whom their prized possession is being snatched away are citizens of this country. We should not forget that they are also voters. Nationalizing or breaking into pieces a world-renowned privately owned institution of the poor, will be a case of extreme abuse of power by the government. The recommendations offered by the Inquiry Commission are not worthy of any serious consideration. Nonetheless, these recommendations are extremely destructive. We must work together to resist them.
Long live Grameen Bank. Let the power of poor women prevail.
This was originally published for the Dhaka Tribune.