Bangladesh

The legal framework analysis aims to provide general knowledge of the national cooperative legislation and of its main characteristics and contents, with particular regard to those aspects of regulation regarding the identity of cooperatives and its distinction from other types of business organisations, notably the for-profit shareholder corporation.

It aims to evaluate whether the national legislation in place supports or hampers the development of cooperatives, and is, therefore “cooperative friendly” or not, and the degree to which it may be considered so, also in comparison to the legislation in force in other countries of the ICA region, or at the supranational level.

In addition, the research aims to provide recommendations for eventual renewal of the legal frameworks in place in order to understand what changes in the current legislation would be necessary to improve its degree of “cooperative friendliness”, which is to say, to make the legislation more favourable to cooperatives, also in consideration of their specific identity. This webpage presents a snapshot of the legal framework analysis results for Bangladesh.

This legal framework analysis examines the current cooperative laws that have a direct impact on the cooperative movement of Bangladesh.

In accordance with the Fundamental Principle of State Policy concerning cooperative ownership, the Government of Bangladesh also issued a National Co-operative Policy, 2012 (published 15 May, 2014), replacing the earlier National Co-operative Policy, 1989 and National Co-operative Policy, 2003, which envisions a broader role for the cooperative movement, particularly in confronting 21st century challenges such as climate change, by contributing to the conservation of natural resources and biodiversity.

The Act does not explicitly mention the ICA Principles of Co-operative Identity, however, one of the aims of the National Co-operative’s Policy, 2012 is to make Bangladesh’s co-operative movement complementary to the ICA’s aims & objectives, a fundamental feature of which is to promote the co-operative difference. Cooperatives have long been an integral part of Bangladesh’s national rural development strategy and cooperative ownership is also featured in the country’s Constitution.

Main laws relevant to cooperatives in Bangladesh

“Co-operative societies” in Bangladesh are currently regulated by:

    1. The Co-operative Societies Act, 2001 (most recently amended in 2013)
    2. The Co-operative Societies Rules, 2004 (“the Rules”).

The Act entered into force on 15 July 2001 and repealed and replaced The Co-operative Societies Ordinance, 1984. The Rules were gazetted on 16 July 2004 and repealed and replaced The Co-operative Societies Rules, 1987.

Under this legislative framework, there is no distinct, special law for particular type of cooperatives. However, the Rules recognise a non-exhaustive list of 29 different types of co-operatives and within the general framework of the Act, special provisions are made for inter alia worker co-operatives, real property-related co-operatives and co-operative land development banks.

Cooperative Friendliness

In general, the cooperative legislation in Bangladesh can be termed as ‘quite cooperative friendly’. However, there are certain provisions within the cooperative legislation which may be oppressive for its members and thereby discourage the use of the cooperative form. One of the primary problems that affects the development of co-operatives in this country is the inadequate implementation of existing co-operative laws.

Key recommendations for improvement

It would be desirable for the Act to explicitly integrate the ICA’s statement on the Co-operative Identity into the Act so as to emphasise the cooperative difference. Current inconsistencies between the Co-operative Societies Act, 2001 (as amended) and other laws, rules and regulations maybe rectified. Empowering and facilitating co-operative societies to resolve most disputes internally, would strengthen their autonomy and self-sufficiency. The same could be said about the requirement for a co-operative’s annual audit to be conducted by a representative of the Department of Co-operatives, instead of an independent chartered accountancy firm. Greater autonomy for cooperative organizations could be provided independent of the Registrar of Cooperative Societies. The training provided to co-operative members should be tailored to the evolving needs, across sectors and geographic locations and in relevant domains such as basics of auditing and accounting co-operative financial documents. The distinction between co-operative surplus, earned through (non-monetary) transactions with members, and co-operative profit should be re-instituted and the former should be tax exempt.

Conclusions

Even though the cooperative legislation in Bangladesh is quite cooperative friendly but there is scope to modernize the legislation and to improve the implementation of existing legislation.

_{The legal frameworks analysis is a tool developed under the ICA-EU Partnership #coops4dev. It is an overview of the national legal frameworks at the time of writing. The views expressed within are not necessarily those of the ICA, nor does a reference to any specific content constitute an explicit endorsement or recommendation by the ICA.}