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    The Review Committee formed by the Finance Ministry of The People’s Republic of Bangladesh has submitted its review report regarding Grameen Bank to the Honorable Finance Ministry on 25 April, 2011. After the report was submitted, various newspapers has carried it in many different ways. Hence some issues of the report has misled the readers. Grameen Bank has prepared a report to address this issue.

    3 May 2011

    Grameen Bank’s Response to the Various Issues Raised in the Review Committee Report as Reported in the Press

    The Review Committee Report submitted to the Finance Ministry by the Bangladesh Bank on 25 April 2011 does not contain any allegations of corruption or misuse of funds by Grameen Bank, Professor Yunus or anyone working within Grameen Bank. In addition, the Report does not contain any objection or statement that Professor Muhammad Yunus, any member of his family or any other person involved in the activities related to Grameen has personally benefitted either financially or in any other way.

    The Report confirms that there was no wrongdoing with regard to NORAD funds. The Report recognizes that GB’s interest rate is the lowest among microfinance organizations in Bangladesh including government run microfinance programmes.

    The Committee has reached the conclusion that Grameen Bank and its sister organizations have had a profoundly positive impact on the socio-economic condition of Bangladesh.

    The report does not contain any objections of wrongdoing or lack of transparency of any kind with regard to Grameen Bank’s management of its overall loan, savings, insurance and other programs.

    The Report records that in 1976 Professor Muhammad Yunus experimented with the idea of bringing rural landless people under a credit programme which led to the creation of Grameen Bank. The Bank has empowered the landless and asset-less people, more specifically women, in rural areas across Bangladesh.

    The Review Committee mentions in its report that Grameen Bank and its officers cooperated completely and in good faith with the Committee and it conveys its sincere thanks and gratitude to all at Grameen Bank.

    However, even though the Report recognized the positive impact of the work of Grameen Bank, it is clear that the Committee did not have an accurate and clear understanding of the information presented to them. This has resulted in a number of issues that have not been presented correctly in the Report. Below are our responses to these inaccuracies presented in the Review Committee Report.

    1. Grameen Bank is a Statutory Public Authority and Professor Yunus and his colleagues are “Public Servants”

    Rejoinder from Grameen Bank:

    Grameen Bank is not a government bank. It is a specialized bank created to serve the rural poor. Grameen Bank was created by a law, i.e., under the Grameen Bank Ordinance 1983, but the majority owners of the bank are poor citizens. In the case of Grameen Bank, the Board of the Bank, not the Government, is the competent decision-making body. Nine of the thirteen Directors of the Board are elected from among the borrowers. Grameen Bank is not, therefore, expected to conduct its operations in the same manner as nationalized or other government-owned banks, to which their own specific laws apply.

    Moreover, according to the Grameen Bank Ordinance, 25 % of Grameen Bank’s ownership belongs to the Government and 75% belongs to the borrowers of the Bank. To date, the Government of Bangladesh has directly or indirectly put up 1.8 Crore Taka in paid-up capital; however the borrowers have increased their share of the paid up capital to 53 Crore Taka. As a result, the government’s paid-up share of capital is now only 3.3% and the remaining 96.7% of the paid up equity of the Bank belongs to the borrowers. In these circumstances, there is no scope for the Bank to be classified as a government bank.

    In terms of legal status, Grameen Bank’s status is similar to that of the Asian University for Women (AUW), located at Chittagong. AUW is an independent international private university created by a special law. However, it is not a government organization. This should make it clear that an organization does not become a government organization just because it is created under a special law.

    Grameen Bank’s board operates independently, with powers vested upon it by law. Its Managing Director is appointed by the Board, and the majority of the Members of the Board are private citizens. Just as Grameen Bank is not a government bank, the Managing Director and his colleagues are not public servants either. The Managing Director of Grameen Bank is the Managing Director of a private bank. By comparison, the Vice-chancellor and faculty of AUW are also not public servants for the same reason.

    A public servant is defined as someone who draws a salary from the government budget. Grameen Bank does not draw any money from government budget nor do Professor Yunus or his colleagues receive their salary from the Government.

    There is no scope to interpret the Grameen Bank Ordinance as setting up Grameen Bank as a Government Bank or Professor Yunus and his colleagues as public servants. If anyone insists on such an interpretation, then it would have to said that he is not familiar with the Grameen Bank Ordinance 1983 or ordinary rules of interpretation.

    It was mentioned in one section (give page no) of the Review Committee report that, “the board members nominated by the Government worked with a misconception about the nature of Grameen Bank. They are considering a Statutory Public Authority as a private bank”.

    It may be mentioned that, the Chairman of the Board of Grameen Bank and two of its Members have been officials of the rank of Secretary to the government, as well as nine private citizens. They all appear to have understood Grameen Bank’s legal status correctly. It is the Review Committee which has misinterpreted the issue of Grameen Bank’s legal status.

    2.0 “Tendency of not following the rules and regulations of Grameen Bank”

    Rejoinder from Grameen Bank:

    This is a baseless allegation. This kind of conclusion was arrived at through an incorrect understanding of and misconceptions about Grameen Bank and the relevant rules and regulations applicable to it. Firstly, the Review Committee has assumed that Grameen Bank is a governmental organization. Thus, wherever they have found any deviation from the practice of governmental organizations, they have come to the conclusion that Grameen Bank has ’not followed the law’. In reality, Grameen Bank is a private bank, albeit established by statute, with private citizens comprising the majority of its Board Members and its shareholders. If the Review Committee had seen the matter in this light, they could not have reached their conclusions about alleged breaches of the law.

    Grameen Bank is a specialized bank created under Grameen Bank Ordinance 1983. From its inception, Grameen Bank has implemented all its programs by following the provisions laid out in its Ordinance. In carrying out its programs and activities, Grameen Bank has never violated, as the Report has purported to find, the rules and regulations laid out in the Ordinance. It has also followed rules and regulations it has developed in conformity with the Ordinance, as follows: (1) Grameen Bank Rules Year (2) Grameen Bank loan policies (3) Board Members Election Regulations (4) Grameen Bank Employment Rules (4) Guidelines related to Savings (5) Grameen Bank Purchase Policy and Accounts Policy.

    Grameen Bank has not violated any law in carrying out its programs as the Report has alleged that it has. Since 1997, Bangladesh Bank has carried out annual inspections and has been submitting detailed inspection reports on Grameen Bank. Grameen Bank has duly been complying with the observations in the said inspection reports of Bangladesh Bank, and the reports of previous years do not point to any outstanding or unresolved issues to date with Grameen Bank.

    In these circumstances we can state with confidence that Grameen Bank’s transactions (e.g all transactions with members, savers, workers, associated organizations) have, to the best of our knowledge, been in conformity with the existing legal framework of the country, the Grameen Bank Ordinance, and in line with the rules and regulations applicable to the Bank.

    3.0 There has been no regulator for Grameen Bank since its inception

    Rejoinder from Grameen Bank: 

    As stated above, Bangladesh Bank has been exercising its power of inspection of Grameen Bank under Section 44 of the Banking Companies Act, 1991 since 1997, and as such Grameen Bank has been carrying out its activities under the supervision of the Bangladesh Bank. Grameen Bank has to obtain licence from Bangladesh Bank to open a branch. As the supervisory body of Grameen Bank, the Bangladesh Bank collects all kinds of information from Grameen Bank on a regular basis in prescribed formats with a view to closely monitoring the activities of Grameen Bank. In addition, Bangladesh Bank carries out on site inspection visits of Grameen Bank, and makes recommendations related to the Bank’s management.

    4.0 The creation of associated companies is beyond the authority of Grameen Bank ordinance

    Rejoinder from Grameen Bank:

    Grameen Bank has not created a single company. Grameen Bank is not the owner of any company. It does not own shares in any company. It does not control any other organization. On the basis of a misunderstanding of Grameen Bank, the review committee has come up with some incorrect decisions and recommendations in this respect.

    The review committee was under the impression that all the companies with the Grameen name, and with which Professor Yunus is associated, are legally connected to Grameen Bank. This is completely inaccurate. There is no control over the name “Grameen”. “Grameen” is not a registered trade name or trade mark. There is no reason to assume that an organization carrying the “Grameen” name, would be legally connected to Grameen Bank. There may be business and financial relationships between Grameen companies. However there is no legal institutional link between Grameen Bank and these companies.

    Since Grameen Bank did not create these companies, there is no question of violating the Grameen Bank Ordinance in the creation of these companies. It is precisely because it would go against the Grameen Bank Ordinance that Grameen Bank did not create any company. In the report, there is even a recommendation to dissolve some of these companies, which are registered under company law as independent companies, and convert them as departments of Grameen Bank. Grameen Bank does not have the legal authority to undertake any such step.

    5.0 Grameen Bank did not have the authority to transfer funds to sister organizations.

    Rejoinder from Grameen Bank:

    Grameen Bank (GB) has not transferred funds to sister organizations without the legal authority to do so. All fund transfers took place in line with agreements between the Government of the People’s Republic of Bangladesh and donor agencies. In the same way the Social Advancement Fund a fund that created on the terms and conditions set out by donors and meant to be used for the welfare of GB members and employees, was transferred to Grameen Kalyan (GK) so that GK could undertake those activities which creates welfare for GB members and employees.

    In the 1980’s GB undertook the Studies, Innovation, Development and Experimentation (SIDE) project. SIDE was under taken to experiment, invent and design new technologies applicable in rural Bangladesh prepare and create new business opportunities and places of work. Various donor agencies granted aid monies for financing of the SIDE project. Donor agencies advised that a separate fund should be formed with this fund. Therefore, on the basis of the advice of donor agencies, the fund received as grant was used to set up a separate fund, known as Social Venture Capital Fund (SVCF). All of these experimental projects were considered risky. In order to protect Grameen Bank from financial losses, donors asked the Bank to keep the accounts of SVCF separate from Grameen Bank account, and that this separation should be made permanent by setting up a separate company out of the SVCF fund, which would then take responsibilities of all SIDE projects. This is detailed in the Annual Review Mission Final Report, dated November, 1990: “The recommendation for a formal legal separation is still important, as it would reduce the risk to the bank. The principle of close-end funding would prevent any further funding from GB.”

    To enable this to take place, an agreement between the Government of the People’s Republic of Bangladesh and donor agencies was signed and in addition, a subsidiary agreement between the Government and GB was signed.

    Accordingly, on 17th January, 1994 a new company was set up in accordance with the Companies Act called “Grameen Fund” (GF) and started its operations. GF was set up as a not-for-profit company limited by guarantee.

    Once GF was established, the entire SVCF fund, which was set up for the SIDE project, was loaned to GF.

    GB did not transfer funds to this sister organization without the legal authority to do so.

    6.0 Grameen Bank’s Managing Director and other employees serving in sister organizations as Chairman/Directors is beyond jurisdiction

    Rejoinder from Grameen Bank:

    The review committee assumes that, Grameen Bank’s Managing Director and other employees are “Public Servant”. That is why they conclude that this issue was not handled in accordance with law. As Grameen Bank’s Managing Director and other employees are not public servants, and their respective terms and conditions of service do not contain any such restriction, hence there is no legal bar against them serving as Chairman/ Director in different organizations on a completely voluntary basis. The Chairman and Director of these organizations take their duty as a social responsibility. They do not take any remuneration or honorarium for performing their duties. As a citizen, any individual can serve as un-paid board member in any organization committed to social goals.

    7.0 The creation of organizations with the personal guarantee of Grameen Bank’s Managing Director and other employees of the Bank is beyond their jurisdiction.

    Rejoinder from Grameen Bank:

    According to the Company Law, when companies that are limited by guarantee are created, the board members of that company have to give a personal guarantee of a specified amount of money. If the company becomes bankrupt, the board members will be personally liable for that specified amount.

    Twelve companies with the “Grameen” name have been registered with the provision of such guarantee. The review committee report states that the Managing Director and other employees of Grameen Bank have given guarantees without prior permission of Grameen Bank’s board. The report states further that it is beyond the jurisdiction for them (Managing Directors and GB employees) to be involved with the creation of new organizations, and provide guarantee to them. It does not mention in what way and for what reason this is beyond their jurisdiction.

    Since no guarantee was given on behalf of Grameen Bank, therefore no liability has been created on Grameen Bank. It is not unlawful or beyond jurisdiction for the individuals to give guarantee on a personal basis. This is a personal decision of individual citizens. There is no relationship at all of this with the Grameen Bank. There is therefore no reason for this to be beyond the jurisdiction of Professor Yunus and his colleagues in Grameen Bank.

    8.0 Grameen Krishi Foundation’s 9.30 Crore Taka loan waived.

    Rejoinder from Grameen Bank:

    In 1987-88 Grameen Bank started a project for running agricultural activities named Rangpur Dinajpur Krishi (agriculture) Project at the request of the Ministry of Agriculture. This project was operated under Grameen Bank’s SIDE program. To finance the SIDE projects, a separate fund called SVCF was created with the consent of the donors, with donor money. The Rangpur Dinajpur Krishi (agriculture) Project was given loan from the SVCF fund like other SIDE projects. Later on, in 1991 the Rangpur Dinajpur Krishi (Agriculture) Project came into being as a legal entity named Grameen Krishi Foundation. As Grameen Krishi Foundation was formulated as a separate organization, the loan given to Rangpur Dinajpur Krishi (agriculture) Project from the SVCF fund was transferred to Grameen Krishi Foundation.

    To bring the SVCF fund created to finance the SIDE projects, under a separate legal framework, in 17 January, 1994 a separate legal organization was created named Grameen Fund in accordance with the advice of the donors. Entire fund of SVCF (including the amount owed to SIDE projects) was given to Grameen Fund as a loan. Grameen Krishi Foundation sent a proposal in 1996 requesting to write off a loan of 11.8 Crore Taka.
    Though Grameen Krishi Foundation is losing enterprise, its wide-ranging activities have made a contribution on the national economy. It has contributed immensely to create a structure for further investment. By considering Grameen Krishi Foundation’s appeal, Grameen Bank’s board in their 52nd board meeting wrote off Grameen Krishi Foundation’s loan of 9.30 Crore Taka.

    Grameen Krishi Foundation was not given a loan from Grameen Bank’s own fund. Grameen Krishi Foundation was given a loan from SVCF fund, which was created with donor money. The donors gave money to invest in such risky projects and that money was invested as such. While creating SVCF, it was assumed that all projects of this venture fund may not be successful, since this is a venture fund. The fund was created to take this risk. As the money was not invested from Grameen Bank’s own funds, the shareholders interests were not hampered through writing off the loan.

    9.0 Grameen Bank gave Borrowers Investment Trust Tk 79.11 crore in violation of rules.

    Rejoinder from Grameen Bank:

    The Borrowers’ Investment Trust was created in conformity with the provisions of the Grameen Bank Ordinance 1983. In accordance with the decisions of the Board of Directors of Grameen Bank, Tk 79.11 crores was given to the Borrowers’ Investment Trust from the Dividend Equalization Fund with a view to financially benefiting from buying shares of Grameenphone and so contributing to the welfare of borrowers. For this reason, the comment in the report that this is not in conformity with the Grameen Bank ordinance is not correct.

    The Borrowers Investment Trust was created with the advice of Grameen Bank’s lawyers. In a similar way, under the Trust Act, the General Provident Fund Trust and Grameen Bank Super Annuation Trust were created for the maintenance and management of staff and employees’ provident fund and the maintenance and management of pension accounts respectively.

    10.0 Not creating legally required reserve fund.

    Rejoinder from Grameen Bank:

    The statement that Grameen Bank did not create legally required reserve fund is not correct. According to Section 25 of Grameen Bank Ordinance, 1983 a reserve fund was created with the approval of Grameen Bank’s board. This is known as General Reserve and shown in Grameen Bank’s balance sheet. Currently, the general reserve is greater than the amount of paid up capital. In 2010, the amount of paid up capital was Tk 54 Crore and 77 Lakh. At the same time, the amount of general reserve was Tk 139 Crore and 40 Lakhs.

    11.0 By mobilizing deposits at a high interest rate, and investing at low interest rates the Bank has incurred a loss

    Rejoinder from Grameen Bank:

    There is an important reason behind why Grameen Bank pays a high interest on deposits. Only Grameen Bank borrowers are allowed to open saving accounts which pay a high rate of interest. This Grameen Bank rule is in line with its basic reason for its existence: Grameen Bank is a bank created for the welfare of landless, rural hard-core poor people. By obtaining deposits at a high interest rate, the Bank encourages savings among the borrowers to strengthen the economic situation of its borrowers.

    Grameen Bank depositors live throughout rural Bangladesh. Bangladesh is a country which is prone to regular natural disasters. Frequent storms, floods, tidal waves, etc., negatively affect the depositors of Grameen Bank. At these times, a need for the depositors to immediately withdraw their deposits is created. Grameen Bank remains prepared to be able to fulfil withdrawal of deposits on demand. Grameen Bank keeps a certain percentage of its deposits liquid through investing it internally in commercial bank FDR.

    Moreover to ensure that Grameen Bank is able to continue its loan disbursement and repayment of loans taken to face natural disasters both from within the country and from abroad during times of liquidity crisis so that the Bank does not default even for one day, it is necessary to keep aside the required funds. This is why Grameen Bank has never defaulted even for one day on loan taken in early period of Grameen Bank both within the country and from abroad. The DSL department of the Finance Ministry has appreciated that Grameen Bank has always been able to repay its loans precisely on time.

    The Bank has not been adversely affected by paying a high interest on deposits and investing those deposits at a low interest rate. It is necessary to keep a certain amount of deposits in hand to ensure liquidity. Rather than keeping idle cash funds, the Bank invested it in commercial banks at the going interest rates. Balancing the contradictory objectives is the goal of fund management.

    12.0 Improper use of Rehabilitation Fund

    Rejoinder from Grameen Bank:

    The Rehabilitation Fund was created on the recommendation of the Government to rehabilitate Grameen Bank borrowers affected by natural disaster. Since the fund was created in 1999, there was no scope to use it for those affected by the severe floods in 1998. Bangladesh is a country affected by natural disasters such as floods, drought, cyclones, tsunami etc. Considering that big natural disasters can take place at any time, and with view to creating a sustainable long term fund, the Grameen Bank used this fund only during times of need.

    Grameen Bank wanted to ensure that the fund would be available for disaster, and would not be exhausted for lesser priorities. Grameen Bank was very selective in giving grants and donations.

    In this connection, it should be mentioned that there was no opportunity to increase the fund, since there was no scope to deposit any more money into fund under the arrangement with the Government, after 2005.

    Considering all aspects, the fund was used properly and judiciously to rehabilitate those Grameen Bank members genuinely affected by natural disasters.

    13.0 Grameen Bank’s response to the issue of Packages Corporation Ltd. as raised in the Review Committee Report

    Rejoinder from Grameen Bank:

    Grameen Bank’s loan and savings program is based on a weekly schedule. In order to efficiently manage these programs, Grameen Bank requires large quantities of printed materials (ledger, registry books, various types of pass books, forms, advice sheets, withdrawal forms, signature cards, etc.). In 1988, once Grameen Bank started work on its expansion phase, there was a large increase in the demand for such printed materials. Because suppliers of such printed materials were not able to ensure that such stationaries were supplied on a timely basis, the Bank’s routine work was at times disrupted. Under these circumstances, to ensure the timely supply of stationaries, thought was being given to setting up a printing press within Grameen Bank. However, this would have required a large investment (land, machineries, building, etc.). In this context, Professor Muhammad Yunus convinced his family to hand over their family printing business, Packages Corporation Ltd. to Grameen Bank for its own use, under a management agreement. In this way, Grameen Bank would be able to ensure that the required printed materials could be supplied on a timely basis. Grameen Bank’s use of the printing press of Packages Corporation Ltd. for its own printing work is allowed by Section 19(e) and 19(u) of the Grameen Bank Ordinance 1983.

    Under the terms of the agreement, the owners have not benefitted financially or in any other way. The owners agreed not to accept any share of profit, did not charge any rent on the building and machineries, any fee of any kind or any other form of financial benefits from Packages Corporation Ltd. during the tenure of the management contract with Grameen Bank.

    Packages Corporation Ltd. was provided with loans to enable it to increase its capacity and efficiency. These loans were provided from funds provided by donors to create, promote or apply new technology and to create new business and employment opportunities. Donors were aware that Packages Corporation Ltd. was given these loans and had given their consent. Grameen Bank has never provided Packages Corporation Ltd. with loans from its own funds. The loans provided to Packages Corporation Ltd. from donor funds have been repaid with interest. Packages Corporation Ltd. worked for Grameen Bank exclusively.

    14.0 Retirement of Managing Director after his reaching 60 years of age.

    Rejoinder from Grameen Bank:

    In accordance with the Grameen Bank Ordinance 1983, Grameen Bank was established with the Government having 60% ownership and the rural landless poor having 40% ownership. Afterwards on 13 September 1983, Professor Muhammad Yunus was appointed as the Managing Director of Grameen Bank by the Finance Department of the Finance and Planning Ministry of the Government. On his appointment letter, no age limit was mentioned for the position of Managing Director. In 1990 through an amendment of the Grameen Bank Ordinance, the ownership structure of the Bank was significantly altered. The Government’s ownership was reduced from 60% to 25% of the Bank, whereas ownership of the rural, poor, landless members of the Bank was increased their ownership of the Bank from 40% to 75%. As a result of the Government’s reduced ownership of the Bank through the amendment of the Ordinance, with the prior approval of Bangladesh Bank, the power to appoint the Managing Director of Grameen Bank was now entrusted to the Board of Directors of Grameen Bank.

    In accordance with the amended Ordinance, the Chairman of the Board of Directors of Grameen Bank sent a letter to the Governor of Bangladesh Bank on 14-08-1990, requesting approval of appointment of Professor Muhammad Yunus as Managing Director of Grameen Bank. In a letter from Bangladesh Bank, bearing reference No. BCD (P) 744 (37) – 1238, dated 25-08-1990, Bangladesh Bank gave its prior approval for the appointment of Professor Muhammad Yunus as the Managing Director of Grameen Bank. Even in the letter of approval from Bangladesh Bank, no age limit was mentioned with regard to the appointment of Professor Muhammad Yunus as the Managing Director of Grameen Bank. In keeping with the content of the approval letter of Bangladesh Bank, Professor Muhammad Yunus was appointed as the Managing Director of Grameen Bank. There was no mention of age limit for retirement in the letter of appointment issued to Professor Yunus.

    On 20.7.1999, in the 52nd meeting of the Board of Directors of Grameen Bank, the issue of retirement of Professor Muhammad Yunus was raised and deliberated upon. After discussions, the Chairman, with reference to Section 14(1) of the Ordinance, concluded that since the power of appointment of the Managing Director was vested in the Board, and since Professor Yunus was appointed by the Board, the age-limit for retirement as contained in the Service Rules of Grameen Bank would not be applicable to Professor Yunus. All other members present in the meeting also expressed consensual opinion in favour of retaining Professor Yunus as the Managing Director, and a Board resolution was accordingly adopted.

    In the same meeting it was also resolved that in order that there is no problem in the appointment of Managing Director subsequently, necessary steps should be taken to make Regulations in light of the Grameen Bank Ordinance in respect of appointment of the Managing Director. Accordingly the Regulations in respect of terms and conditions for appointment of the Managing Director were made published in the Bangladesh Gazette on 19.11.2001.

    In the Detailed Inspection Report of Bangladesh Bank based on the accounts of Grameen Bank as of 31.12.1999, it was observed (in paragraph No. 21.2) that approval had not been obtained from Bangladesh Bank “pursuant to Section 14(1) of the 1983 Ordinance in this regard” i.e., about Resolution in the 52nd meeting that there was no age-limit for retirement of Professor Yunus and that he would remain in his post until otherwise decided by the Board. In response, Grameen Bank by its letter dated 20.06.2001 informed the Bangladesh Bank that the petitioner had been appointed as Managing Director pursuant to approval dated 28.09.1990 given by Bangladesh Bank.

    Bangladesh Bank and Grameen Bank Officials held a Joint Meeting on 15.01.2002 for paragraph-wise discussion of the Compliance Report dated 20.6.2011. Regarding the aforesaid paragraph No. 21.2, it was decided that the objection of Bangladesh Bank would be considered resolved upon submission by Grameen Bank of a copy of the gazette providing that the Service Regulations of Grameen Bank would not be applicable to Managing Director. Accordingly, the Regulations regarding Appointment of the Managing Director 2001 were submitted by Grameen Bank as enclosure “Gha” under cover of a letter dated 16.01.2002.

    No further mention has been made of the matter, i.e., of any requirement of obtaining prior approval for the appointment of the Managing Director, in any of the subsequent Detailed Inspection Reports issued regularly by Bangladesh Bank since that date, i.e. for over eleven (11) years. It may be noted that such Reports contain a section regarding compliance with the previous year’s inspection, and remarks are made there with regard to any issue of non-compliance. The Bangladesh Bank had made no remarks with regard to the service of the Managing Director for over eleven years, and thus it was manifestly evident that the Bangladesh Bank had no further concerns regarding or objections to the matter.

    15.0 Loans provided to Grameen IT Park by Grameen Bank were beyond its jurisdiction.

    Rejoinder from Grameen Bank:

    Grameen Bank did not provide Grameen IT Park with any loans. Grameen Bank rented out office space to Grameen IT Park. Since the organization was not able to carry out its business activities as planned, it became a loss making organization, and could not pay the rent for the space it rented from Grameen Bank. Since Grameen Bank was not able to recover the amount owed to it as rent from Grameen IT Park, following the existing accounting rules, the account was written off. Grameen Bank did not provide Grameen IT Park with any loans nor did it write off any loans given to Grameen IT Park.

    16.0 Floor rented to Yunus Centre at nominal rate.

    Rejoinder from Grameen Bank:

    Grameen Bank authority leased a floor of the Grameen Bank building to Professor Yunus for his efforts in bringing recognition for the country and turning Grameen Bank to an organization of national pride just as the government give rewards to special person or winning football team or cricket team for enhancing the image of the country. After receiving the Nobel peace prize, a decision was taken to lease the 16th floor of the Grameen Bank headquarters to Yunus Centre for a period of 24 years, unanimously by the Grameen Bank’s 84th board meeting. Yunus Centre’s main goal is to promote the work and philosophy of Professor Muhammad Yunus at home and abroad. The Grameen Bank board decided to lease this floor as recognition to his contribution in helping the humanity through his creative and innovative efforts.

    17.0 Member directors and Government nominated directors do not have any role in the Board of Directors

    Rejoinder from Grameen Bank:

    Of the 13 Board members, 9 are elected from Grameen Bank members and the remaining 3 members are nominated by the Government. The Government nominates the Chairperson and two high level Government officials (usually of rank of Secretary) to be members of the Board of Directors. To date, the Board always ended up with unanimous decision. If a member raises an objection over an issue, and he/she cannot be persuaded by arguments of others, then with unanimous decision the item in the agenda is withdrawn from discussion and the management is asked to review it and bring it up in the next meeting. In other words, the Board always aimed at arriving at a consensus decision.

    From the beginning, the Chairperson of the Board has been chosen from among the nationally known personalities. In line with regulations, 9 Board members are elected in a transparent process from the borrower shareholders, and these Board members represent the Grameen Bank members on the Board of Directors. The presence of these 9 borrower shareholder members creates a special environment for discussion in the Board. With their participation, it is possible to exchange views regarding the acceptability of decisions made by the Board. It is not possible to gain this insight from anyone else. They are the owners of the Bank. All of the decisions taken by the Bank will come to bear on them. Their lives are intertwined with Grameen Bank. And their presence in the Board Meetings, the discussions become more realistic and rooted in their life experiences. They provide the immediate sounding board for all decisions.

    The Chairperson, the two Government nominated Board members and the elected members from Grameen Bank’s borrower shareholders all have an extremely important role to fulfill and they performs their responsibilities in a totally dedicated way. It is very unkind and unfair to question the role of the Board Members of Grameen Bank.


    Grameen Bank has always tried to work with transparency and within legal bounds. There may be shortcomings in its innovative creations, but there was never any deliberate intention or tendency to break any law. Socially committed members of Grameen Bank’s Board have performed their responsibilities with great sincerity. If the review committee had the full understanding of the laws, rules and procedures guiding the operation of Grameen Bank, they would not have made the negative comments that they made, nor reached negative conclusions they have reached.

Banker to the Poor   Banker to the Poor Banker to the Poor GF USA