Bangladesh commission will probe Grameen Bank and its businesses; FM says some unauthorized

DHAKA, Bangladesh – Bangladesh has ordered a four-member commission to investigate 54 businesses linked to the pioneering microlender Grameen Bank founded by Nobel laureate Muhammad Yunus.

The probe came weeks after Finance Minister A.M.A. Muhith said the bank’s board had not authorized most of the affiliates. U.S. Secretary of State Hillary Rodham Clinton urged Bangladesh’s government on a recent visit here to not to do anything that might undermine the effectiveness of the bank. Muhith later dismissed her remarks as unwarranted.

A Finance Ministry statement on Wednesday said the commission will suggest “future steps to be taken about Grameen Bank and its affiliates.” It will be headed by a former government official and must submit a report in three months.

The statement did not provide details of the tasks of the commission. Muhith said earlier it will be investigated how the businesses, including renewable energy, telecommunications and garments, could be regulated.

A Bangladesh government-appointed investigation last year found that Garmeen Bank violated its charter as a microlender by creating affiliates that did not benefit the bank’s shareholders, and recommended the government integrate those affiliates with the bank.

Yunus maintains those social businesses are independent and should remain so.

He has accused the government of attempting to interfere in the bank’s activities. The government has denied the allegation.

Garmeen was a pioneer in issuing small loans to the poor as a way to overcome poverty, earning it and Yunus the 2006 Nobel Peace Prize. It has about 9 million borrowers, mostly women.

Prime Minister Sheikh Hasina’s administration ousted Yunus, 71, as managing director of Grameen Bank last year in a dispute over retirement age. Yunus argued he was exempt from regulations that set the retirement age at 60 but lost a court appeal.

Yunus has had frosty relations with Hasina. She was reportedly angered by Yunus’ 2007 attempt to form his own political party backed by the powerful army when the country was under a state of emergency and Hasina herself was behind bars.