Bangladesh says Yunus`s Grameen `flouting` rules
The investigation into Grameen Bank cleared the bank of misusing Norwegian aid.
Dhaka: A Bangladeshi probe has accused
Nobel laureate Muhammad Yunus of turning his pioneering
microfinance bank into a "massive conglomerate" in violation
of its own rules, the probe head said Tuesday.
The investigation into Grameen Bank cleared the bank of
misusing Norwegian aid and of charging excessive interest on
loans, the finance minister announced yesterday.
But the chief investigator said Tuesday the probe also
found a "large-scale trend in flouting of rules and
regulations in the management of the bank".
He said the government ordinance that set up the bank
-- which shared the 2006 Nobel Peace Prize with Yunus for
their work providing small cash loans to the poor -- should be
amended to tighten regulation of Grameen.
"It needs a new legal framework" to regulate the bank
and its many sister firms, known as social businesses, which
include a number of profitable foreign joint ventures, probe
committee chief AK Monowar Uddin Ahmed said.
"Grameen Bank is now the kind of massive conglomerate
we see in South Korea or Japan," he said.
Grameen Bank has huge influence in Bangladesh, and its
sister companies have moved into solar panels, mobile phones
and other consumer goods, but this expansion did not adhere to
the original Grameen Bank law, the probe said.
"The Grameen Bank has violated its own laws, rules and
regulations... consistently on the way," the committee`s
The investigation was launched after a Norwegian
documentary claimed $96 million of aid was diverted in 1996
from Grameen Bank to other parts of Grameen group.
"Grameen Bank has become a person-oriented
organisation, not a rules or system-based organisation," the
report said, calling for an overhaul of the board structure
and the restructuring of some sister companies.
"Together, Grameen Bank and its sister organisations
have emerged as a big conglomerate, which needs to be
redefined and restructured," the report said.
The bank is still awaiting a final decision on a
separate government claim that Yunus was illegally reappointed
managing director, with the Supreme Court due to review an
order for his dismissal early next month.
Yunus was last month fired by a central bank order,
which claimed he failed to seek the bank`s approval when he
was reappointed managing director of Grameen Bank indefinitely
The High Court upheld the order in a March 8 ruling,
saying the dismissal was legal and that Yunus had also
exceeded Grameen Bank`s mandatory retirement age of 60.
Backed by international lobbying, Yunus has defied the
sacking order by filing a legal appeal and continuing to work
at Grameen Bank`s Dhaka headquarters.