A government panel has proposed appointing deputy commissioners to oversee the elections for nine borrower-director posts in the 12-member Grameen Bank board, a move which enhances the government's role in the organisation.

The recommendation comes as part of the government's reported plan to restructure the Nobel-winning microfinance institution in a bid to boost oversight and rein in its activities.

"At the moment, there is no rule for the appointment of directors for the Grameen Bank board. There is an instruction regarding it, but it is not legal," Finance Minister AMA Muhith said yesterday, adding that a framework would be designed in a "couple of days".

FROM PAGE 1

At present, the government appoints three of the directors, including the chairman, of the microcredit organisation's board, while the remaining nine members, all ofwhom are women borrowers, are elected from grassroots level through a three-tier election system.

The centre heads of a branch nominate the most qualified borrower and send her to compete at the 'area' level. The areas then forward a candidate to the 'zone' level. Nine borrowers are chosen as directors from the nine zones or constituencies.

But the two-member committee, formed in April by the finance ministry, suggested a two-tier system. In the first tier, the borrower-shareholders of each of the nine constituencies would elect a 15-member electoral body. The members of the nine electoral bodies would then decide among themselves who would be serving as directors.

Under the current system, the Grameen Bank board appoints the election commissioner from its officials, and the zonal officers act as returning officers. The two-tier system calls for deputy commissioners of each of the nine constituencies to administer the elections.

“The application of the proposed ruleswill eventually bring about a wider representation and sustainability of the board by reducing the influence of any particular group or vested quarter," the committee said in its recent letter to the banking division of the finance ministry.

At present, the election for the nine borrower-directors is held every three years, but as per the recommendations of the committee, the election would have to take place every year.

The elected directors would still hold office for three years, but one-third of them would retire from the board each year to make way for new directors. The rotation of elected directors for the first two years shall be decided by mutual understanding or lottery, said the committee. The retiring directors cannot be elected for consecutive terms.

The proposals came after the Grameen Bank Commission, in its interim report, said the existing electoral process goes against the most fundamental and explicit directive of the Grameen Bank Ordinance.

But the current nine elected directors as well as Prof Muhammad Yunus, the organisation's founder, rebuffed the move, saying the changes go against the interests of the bank and are an attempt to take control of the bank.

"We will never accept the proposals—it is part of the government's scheme to take over the bank," Tahsina Khatun, a member of Grameen Bank board, told The Daily Star yesterday.

She said every item in the draft election rule is against the interests of the bank—and are, therefore, unnecessary.

"The existing rules have served us well over the years, and we will persist with them," she said, adding that if outsiders are brought in to conduct elections it would only create chaos.

Khatun said the govern-

ment has targeted the elected directors as the current nine members have been very vocal against any state intervention since Prof Yunus stepped down as managing director in 2011 and have managed to block all the authorities' plans.

She was backed by Prof Yunus, who also criticised the suggestions to amend the rules.

"Elections to the borrowerdirector posts are being held without any problems. Nobody has raised questions about it so far and said injustice has been done," he said while speaking at a public reception accorded to him in Dhaka on Friday.

Were the elections to be held every year, as per the suggestions of the committee to fill in the three directorial posts, it would take up all of Grameen Bank's time. "We would have to leave our usual activities aside," Khatun said.

“These are all unrealistic ideas," added ProfYunus.

If approved, the Grameen Bank (Election of Directors) Rules, 2013 will replace the Grameen Bank (Election of Directors) Rules 1987.

A finance ministry official said an inter-ministerial meeting would discuss the draft and opinions from the law ministry would be taken before the new rules take effect.

Shah Alam Sarwar, managing director of IFIC Bank, was appointed as convenor of the committee and Murad Reza, additional attorney general of Supreme Court, the member secretary.