Grameen Bank has virtually come under full state oversight for the first time in its 33-year history, after the current board's tenure expired on Sunday and the government failed to hold elections to select its successor.

"The board is defunct now. It does not exist," Finance Minister AMA Muhith told reporters yesterday at his secretariat.

The Grameen Bank board is comprised of nine borrower-directors, who are elected every three years, and three government-nominated directors, one of whom serves as the chairman.

As per rules, if the posts of the nine elected directors become vacant, the chairman and the other two government-nominated directors will meet the quorum until the positions are filled by election.

In other words, the three members selected by the government will be enough to take decisions for the microcredit lender.

The finance minister reiterated the same, saying the elected directors were no longer members of the board upon the expiry of their tenure on Sunday.

But Tahsina Khatun, one of the nine borrower-directors and also the spokesperson for the group, said they would attend board meetings as usual as their successors are yet to be elected.

"The borrower-shareholders are the real owners of the bank. A board where there is no representation of the borrowers can't be a board of Grameen Bank," she added.

The rules, however, do not state whether the nine elected directors, upon expiry of their tenure, would continue to hold their posts until the new committee is elected. 

Until 2012, the Nobel Prize-winning organisation itself would hold the elections every three years to fill in the nine posts of borrower-directors. The election would be held at least two months before the expiry of the existing committee.

Then in November 2013, the government passed the Grameen Bank Act 2013, which gave the central bank the authority to hold the elections. Bangladesh Bank, however, refused to take the responsibility.

Subsequently, the government last year amended the rules to give itself the authority to form a three-member commission that would oversee the elections. A retired district judge will serve as the chief election commissioner.

The commission is yet to be formed, due to which this year's scheduled election could not be held.   

But Muhith yesterday stated that the election commission has been formed. "I don't know. I think it has been done. Dates have been announced for the elections. Hasn't it?"

He was promptly corrected by the reporters, who pointed out that the government is yet to find the retired district judge who would head the commission.

"Oh, the people have not been appointed yet? In that case, how will the election be held? I suppose the issue then has been stuck at finding the men."

ASM Mohiuddin, acting managing director of Grameen Bank, said once the election commission is formed, it would have to organise elections within a year under the new law.

"In my opinion, the current committee has to hand over power to a new committee. But we have not got the new committee yet."

Meanwhile, Khondaker Muzammel Huq, chairman of Grameen Bank, has been unwillingly leading the microcredit organisation for a year and a half now.

He had handed in his resignation in August 2013 owing to illness, but his resignation was not accepted. "All the people that I offered the post to turned it down," said the finance minister.

As for the other two government-appointed directors, Suraiya Begum, secretary of the Statistics and Informatics Division, has been told to continue to work until further notice, while Shah Alam Sarwar, managing director of IFIC Bank Ltd, has been given an extension of two years.

"This is a really horrible situation at Grameen Bank, thanks to Prof Muhammad Yunus," Muhith added.