Controversy surrounds Grameen Bank Chief-Atasi Das

The renowned economist, Muhammad Yunus, who put Bangladesh in the world map, when he shared the Nobel Peace Prize 2006 with Grameen Bank, his pet microfinance initiative, towards financial inclusion of the marginalized Bangladeshis, has been accused of overstaying in his office by the apex banking authority and the judiciary in Bangladesh.

About Grameen Bank
The Grameen Bank Project was incorporated as an independent bank through government legislation in October 1983. The bank mostly serves the rural poor (issues collateral-free loans); bank borrowers own 90 percent of the shares, while the Bangladesh government owns the remaining 10 percent. The Grameen Bank has a huge mass base and comprises 26,000 members and eight million borrowers.

Microlending
Micro-credit is a means of promoting financial inclusion, particularly in the developing economies; it helps to reinstate the prosperity, dignity and human rights of the socio-economically disadvantaged masses. Yunus and the Grameen Bank have successfully translated the vision of millions of poor people into reality.
Over 64 crore people globally, have benefited from micro-loans in 2009, according to a study by the Microcredit Summit Campaign. Particularly remarkable is the participation of the women entrepreneurs, who have demonstrated high loan-repayment and re-investment rates and business success.
Micro-finance institutions in the long run, need to address the problem of over indebtedness; they should desist from profit motive and retain their focus on development and poverty alleviation. They ought to charge low interest rates from the poor and should promote local deposit mobilization, instead of seeking money from loan funds (from commercial investors).

Micro lending is facing substantial political hostility in India, after aggressive selling by multifarious unregulated microfinance firms (with questionable lending discipline) pushed a large number of poor farmers into debt trap in Andhra Pradesh.
Some MFIs hold that the stupendous growth of the micro finance industry in recent years has prompted negative reactions from the political bosses, since the empowered poor have made them insecure.

Latest developments
A Bangladesh high court has termed Muhammad Yunus’ term as Managing Director at Grameen Bank, since 1999 illegal. The Nobel laureate appealed in the Supreme Court against the Bangladesh High Court verdict; the appeal will be heard on March 15. The high court order had turned down Yunus’ petition against a government order, which dismissed him as the head of the Gramen Bank, founded by him.
Bangladesh’s apex monetary authority, Bangladesh Bank has held that the septuagenarian economist was holding office without any legal basis. Bangladesh Bank relieved Yunus from his duties on March 2 through a directive. The apex bank has alleged that Yunus did not seek its approval after re-appointment as managing director in 1999, in violation of the statutes of the partly state-owned Grameen Bank.
The court also noted that the Nobel laureate’s term as MD since 1999 was also illegal, as he was by then already above the retirement age of 60 years. The high court upheld the right of the apex bank to issue such orders under the Bank Companies Act.
Earlier the Nobel Committee had defended Yunus when allegations of illegal funds diversion were leveled against him. The ruling party came down heavily on Yunus, after a Norwegian documentary alleged in December 2010 that Yunus had tapped the Grameen Bank reserves for $48 million worth of Norwegian aid. The allegation was later found to be misplaced by the Norwegian government.

After reactions
The US administration has reportedly cancelled any further high-level diplomatic interactions with Bangladesh, until the Yunus issue is amicably settled. This could have serious ramifications on the Secretary of State, Hillary Clinton's impending Dhaka visit.
Eminent personalities worldwide have formed the 'Friends of Grameen' forum for supporting the cause of Yunus; led by former Irish prime minister and UN official, Mary Robinson, the group includes names like former Indian chief justice, J.S. Verma.
The Grameen Bank beneficiaries and employees have opposed the ouster move.
Yunus at a personal level has recounted that after an entire lifetime of work towards the betterment of the life and livelihood of the poor people in Bangladesh, he wished for a “smooth transition” of management. Apart from receiving an overwhelming support from the international community and the civil society groups, the Bangladesh opposition chief and former Prime Minister, Khaleda Zia has also batted in Yunus’ favour. The media has termed the sacking of Muhammad Yunus as ‘political vendetta’.

Well-wishers feel that the ‘political vendetta’ could be a backlash of Yunus’ efforts at establishing a political party to weed out corruption from Bangladesh, a few years back. Another issue is the reported control of the resources and popularity base of the bank by the government.