The law for the bank passed in parliament

The parliament yesterday enacted the law for Palli Sanchay Bank, a specialised bank for rural poor along the lines of Grameen Bank.
The version of the act passed in parliament is more or less the same as the draft law approved by the cabinet last November.
Under the Palli Sanchay Act 2014, the new bank will emerge from the government's One House, One Farm project, just as Grameen Bank was born in 1983 following the conversion of Muhammad Yunus's Grameen Bank project in Jobra village near Chittagong University.
“This bank will give an institutional framework to save money for the beneficiaries of the One House, One Farm project,” Finance Minister AMA Muhith told the parliament, adding that the purpose of the bank is to mobilise the rural people's savings.
The government wanted to set up such a specialised bank as it has lots of experience in this area, Muhith said, recalling that he himself got the Grameen Bank Ordinance passed in 1983.
The government will hold 51 percent of the bank's ownership and the remaining 49 percent would go to the 17,300 cooperative societies of the One House, One Farm project.
The law said the bank's authorised capital would be Tk 1,000 crore and paid-up capital Tk 200 crore. The cooperative societies' total fund of Tk 1,342 crore would be transferred to the new bank.
The government can raise the paid-up and authorised capital through gazette notification and the bank's head office will be located in Dhaka.
The bank's board of directors will consist of 18 members, with the chairman to be selected by the government from the board members.
Of the total, seven directors will be selected from the shareholders from the division level associations of the One House, One Farm project, each represented by individuals.
The remaining 11 posts will include: a representative from the finance division, a member of the rural development and cooperatives division, director general of the Bangladesh Academy for Rural Development and the bank's managing director.

A representative from the legislative and parliamentary affairs division, two upazila chairmen selected by the government and four experts on rural economy and macro-financing, will also be present in the board.
Palli Sanchay Bank will not be governed under the Banking Companies Act, meaning it would remain mostly out of bounds of the central bank.
But like Grameen Bank, it would have to submit reports as per 'Bangladesh Banks demands and its audited reports would be presented to the government and BB at the end of each financial year.

The managing director can be appointed from the board or from outside, with BB's approval. He/she would be allowed to serve in the position until 65 years of age, in contrast to the maximum age of 60 for Grameen Bank's MD.
The activities of the specialised bank, in many aspects, would also resemble those of Grameen Bank. Like Grameen Bank, it will collect deposits and lend to its members.
The bank will provide small loans aiming to alleviate poverty and get the rural poor into the habit of saving.
The One House, One Farm is a project under the Annual Development Programme, the first phase of which started in 1997. The second phase of the project started after the present government assumed power.