Bangladesh’s finance minister defends Yunus

Grameen Bank trashes allegations of violating Bangladesh`s financial laws.

Dhaka: Bangladesh government has came in defence of Nobel Laureate Muhammad Yunus as his Grameen Bank trashed allegations of fund diversion breaching agreements with donors and violating country`s financial laws.

"We have a tendency to look for others` faults. I see no fault in the transfer of the fund," Finance Minister AMA Muhith told newsmen on the sidelines of a function late yesterday a day after the Grameen Bank called the allegation "a total fabrication and baseless”.

He said Grameen Bank already gave a statement saying there was an understanding long time ago between the Bank and the Norwegian government and "there is no fault in it if the (Grameen Bank) claim is true”.

Muhith`s comments came despite a wide belief that Prime Minister Sheikh Hasina`s ruling Awami League government had some reservations about Yunus, whose experiment of poor men`s banking earned Bangladesh the fame of being the home of micro-credit, or his Grameen Bank.

Yunus and Grameen Bank had jointly won the Nobel Peace Prize with the micro credit guru in 1996.

"The (media) reports gave the impression that these transactions were somehow secretive. There was nothing secretive about. It was a matter of honest disagreement (with the foreign donor)," said the Grameen Bank statement late Friday.

The nearly 2,000-word statement issued three days after the Norwegian TV aired a documentary sparking a wide sensation, said decisions to transfer the amount to another venture were taken by Grameen Bank Board, with "due deliberation, good faith, and with good intentions to benefit the poor."

"There was no wrong doing in the agreement between Grameen Bank and Grameen Kalyan (to transfer the amount)," said the statement signed by the Bank`s general manager Mohammad Shahjahan.

It added that the actions taken by the Board were viewed as the best use of the funds at the time, a way to ensure Grameen Bank would remain financially accountable for the money while still ensuring that the borrowers received the most possible benefit from donors` grants.

The private BDNews24 news agency of Bangladesh carried a report quoting the Norwegian TV on December 01 alleging that Yunus drew off nearly USD 100 million in aid for poor borrowers of Grameen Bank to Grameen Kalyan, a non-profit sister venture of Grameen Bank in 1996 violating agreements with the donor and financial laws of Bangladesh.

"It was a matter of differing views on the subject. NORAD considered it a departure from the provision of the agreement, while Grameen Bank thought it was done within the agreement," the statement said.

It said the dispute was revolved 12 years ago as the Grameen Bank did not want go into battle with NORAD on this issue and reversed its decision and restored the status quo, which was also appreciated by the then Norwegian envoy in Dhaka in a letter to Yunus.

"The Embassy highly appreciates your cooperation in solving this issue, and is pleased to have arrived at a solution which is satisfactory for Grameen Bank as well as the embassy," the statement said quoting the ambassador`s letter in May 1998.

The Norwegian TV documentary had quoted Professor Jonathan Morduch of New York University saying that Grameen Bank received USD 175 million in subsidies through the Norwegian aid agency for offering tiny loans to ultra poor people.

"When the Norway embassy, Norwegian aid agency Norad and the Economic Relations Division in Bangladesh demanded that he return the money to Grameen Bank, the micro credit guru gave back less than some USD 30 million of the 100 million.”

“The remainder remained with Grameen Kalyan," the report said.

But the Grameen statement all the donors` money was transferred back and only USD 11 million remained with Grameen Kalyan, a non-profit company to dedicated to carryout "social advance activities" in areas of health, education and technology among the Grameen`s micro-credit borrowers and poor employees.

"So the report where it mentions that Grameen Bank transferred USD 100 million and transferred back only USD 30 million is completely false," it read.


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