Reazul Bashar
Dhaka, Apr 25 (bdnews24.com)—Grameen Bank stepped beyond its legal authority to divert fund to another arm of the Grameen family in 1996, says an inquiry by top professionals.
The five-member fact-finding committee, formed in January, on Grameen Bank submitted its report on Monday. The inquiry was led by Dhaka University economics professor Dr A K Monaw-war Uddin Ahmad, who specialises in regulatory issues and teaches international trade.
The committee said that a 'credit account' was created in Grameen Kalyan by transferring the fund in the organsiation to make the fund interest-bearing.
"It seems that the dispute regarding use/transfer of Norad aid funds for Grameen Bank has been settled. But the fund transfer to different organisations by Grameen Bank was beyond its authority (ultra vires)," the report said, a copy of which is available with bdnews24.com.
"Grameen Bank, from its revolving fund received from Norad and other donors, transferred Tk 3.47 billion (Tk 347.18 crore) to Grameen Kalyan.
"The bank in its balance sheet made revolving fund account debit and 'borrowing from Grameen Kalyan' account credit, meaning it decreased equity and increased liabilities," the inquiry found.
"By doing so, the ownership of the fund was transferred. It can be considered as aid, since no liabilities or return was incurred by Grameen Kalyan. Revolving fund should be used by Grameen Bank repeatedly," the report added.
"Besides, fund transfer issue was not mentioned in the agreement between Norad and Bangladesh government. It means the action (fund transfer) of Grameen Bank was ultra vires. As a result, the objection raised by Norad on 15 December, 1997 seems logical."
"Grameen Bank sent a letter to Norwegian embassy on January 8, 1998 and clarified that if the fund was managed by other organisations then efficiency would be increased, accounts of revolving fund would be properly utilised and it would reduce the tax burden."
But the committee said it was not within the legal authority of Grameen Bank to transfer fund without the permission of donors on the excuse of reducing tax burden.
Dr Ahmad's team included central bank deputy governor Nazrul Huda, former deputy Comptroller and Auditor General Rokeya Deen, former bank management professor R M Devnath, and Supreme Court lawyer Mohsin Rashid.
bdnews24.com/rb/ssz/bd/2039h
