Finance minister AMA Muhith Sunday said the country’s pioneer microcredit institution Grameen Bank (GB) will be brought under Bangladesh Bank’s regulation as per the recommendations of the inquiry commission.

“We have come to know about the content of the inquiry commission’s report and are working to bring changes in recommendations placed in the report for more effective regulation of the microcredit bank,” he told reporters while emerging from a meeting of the cabinet committee on public purchase at the Secretariat. 

Muhith said the commission’s report will be handed over to him (finance minister) on September 30. 

Since its founding under a special ordinance 1983, Grameen Bank has been regulated under a governing body of the microcredit bank comprising its member-directors. 

Grameen Bank and its founder Dr Mohammad Yunus jointly won Nobel peace prize in 2006 for contribution to poverty reduction, women empowerment and socio-economic development of the country. 

However, the government has been in tussle with Dr. Yunus following his removal from the position of managing director of the bank over age-limit and allegations of financial irregularities.

The central bank dissolved the GB committee headed by microcredit guru and Nobel laureate Dr Mohammad Yunus on March 2 in 2011. 

The government in May last year formed a three-member commission to review the GB’s governing structure and its relations with the independent associated companies founded by Dr. Yunus.

Ajmalul Hossain QC, a member of the commission, told the media on August 16 that the commission as per it terms of references instructed them to recommend an authority to regulate and supervise Grameen Bank.

The interim report of the commission submitted to the government in February 2013 largely focused on Grameen Bank and provide options for the government to restructure the microcredit bank, he said.

The finance minister said that the Grameen Bank Commission would submit its final report on the microcredit bank and its 48 associated organisations.

Earlier in May this year, the central bank recommended amendment to both the Micro-credit Regulatory Authority (MRA) Act 2006 and Grameen Bank Ordinance 1983 in order to bring the latter under the MRA regulation.

The central bank’s recommendations have been incorporated in GB Review Committee aiming to ensure transparency by proper monitoring and evaluation of its assets. 

A central bank source then told daily sun that the Bangladesh Bank authority sent the recommendations to the GB Inquiry Commission for next course of action.

The GB inquiry committee in its review report observed that the GB needs proper regulation as it serves a large population across the country in its drive for poverty alleviation by promoting entrepreneurship for poor women in the rural areas. 

A central bank source said regulation of the GB has become complicated following removal of Dr. Yunus as there was a self-guided separate body for regulating the microcredit bank as per GB ordinance 1983.

“The review committee in its report pointed out that the GB is a micro-credit organisation and it should be regulated under MRA. But the existing MRA rules do not cover it. So, the amendment is essential,” sources said.

The inquiry commission was formed under Section 3 of the Commission of Inquiry Act 1956. Government notification was made in this regard on May 15, 2012 and published in Bangladesh Gazette on May 27 of the same year.

The Grameen Bank Review Committee (Monwaruddin Committee) formed earlier in its April 25, 2011 report pointed out various ‘conflict of interest’ transactions of Prof. Yunus with GB and its associated organisations which was seemingly ignored or approved by the GB’s previous board of directors.