Thaindian News

Dhaka, April 27 (IANS) A committee appointed by the Bangladesh government to probe the working of the Grameen Bank has accused the micro-credit agency run by Nobel laureate Muhammad Yunus of “consistently violating its own laws, rules and regulations” and suggested that it needs an effective regulator.

The committee’s report, submitted to Finance Minister A.M.A. Muhith Monday, accuses the bank of violating rules involving “administrative decisions, procurement, role of the board director, creation of different companies and organisations, use of funds, and the intra-company diversion of funds”.

“The Grameen Bank urgently needs an effective regulator,” the report concludes.

The report does not say that Yunus or any of the officials acquired any personal benefits from the transactions.

Yunus was removed from the bank March 2 through an order of the central bank, which said his continuance at the age of 71 was in violation of the rules that require a chief executive to retire at 60.

The Grameen Bank’s new management Tuesday noted that media reports of alleged irregularities were “untrue and unfounded”.

The report has not yet been published but a leaked copy was available on a news agency website, New Age said Wednesday.

A significant focus of the report is the relationship between the Grameen Bank and “associate companies” on which Yunus and many senior staff members sit as company directors.

The report lists 28 associated companies that received funds from either the Grameen Fund or the Grameen Kalyan and 12 more associate organisations that received money from the Grameen Telecom, which the report says started off with Grameen Kalyan funds.

The committee report says that the “funding and the creation of these organisations are beyond the jurisdiction of the Grameen Bank”.

It points out that these organisations are not owned by the Grameen Bank and are not accountable to it. “This is a grave concern,” the report says.

The committee, however, does not allege that Yunus or other board members financially gained from these arrangements.

The committee also says that the bank faced losses when it rented out 11,000 square feet of office space to the Yunus Centre at a nominal rate.

The 90-page report proposes a number of reforms.

It suggests that the government should frame a national policy on microcredit for the landless considering its role in reducing poverty, and should subsequently change the law after forming a Grameen Bank reform commission.

It also suggests that the Grameen Bank should be regulated by the Microcredit Regulatory Authority.