The immense popularity and honour did not come to the ‘Banker to the Poor’ professor Yunus overnight. The Vanderbilt University doctorate and former Chittagong University professor had to toil for his present worldwide fame. The soft spoken gentleman started his mission to empower the poorest of the poor with small loans in 1976. Soon he left his job and initiated the launch of a bank with a difference.

With a special order (Grameen Bank Ordinance, 1983) of the Bangladesh government, Grameen Bank (literary meaning village bank) was created.

Soon after, the bank gained popularity and attracted the attention of economists, civil society groups and also the international media. The bank gave collateral-free small loans, offered ownership to the beneficiaries, insisted on social empowerment of the borrowers, most of whom are women.

The bank today has the equivalent of US $1.4 billion in deposits and more than 8.3 million borrowers and amazingly, 97 per cent of these borrowers are women.

The bank maintains over 2,560 branches in 81,373 villages. With a staff of nearly 22,250, the bank has disbursed 576.83 billion Bangladesh takas (US$9.87 billion) as loans to the poor.

Micro lending, originated by professor Yunus, has spread rapidly across South Asia, particularly to India. After experimenting with micro lending on a small scale, he created Grameen Bank.

The bank enjoys a recovery rate as high as 97 percent. The 25 percent of the bank that is not owned by the poor is held by the Bangladesh government. The borrowers are also empowered to elect nine of the bank’s Board of Directors. The government appoints the Chairman and two board members of the 13-member team where professor Yunus functioned as a non-voting member.

Contrary to general perception, Grameen Bank has low interest (simple) rates. The bank offers four interest rates comprising 20% for income generating loans, 8% for housing loans, 5% for student loans, and 0% loans for beggars (struggling members).

Under the struggling member scheme, the bank offers loans to the disabled, blind and older people, who can go and sell various items door to door. Since 2002, Grameen Bank has disbursed over Taka 153 million, of which 78% has been paid off. Till date, nearly 20,000 beggars (out of 112,232 beneficiaries) have left begging for other income generated activities.

Under the Grameen family, many independent companies like Grameen Phone Ltd, Grameen Telecom, Grameen Communications, Grameen Cybernet Ltd, Grameen Solutions Ltd, Grameen Information Highways Ltd,  Grameen Bitek Ltd,  Grameen Udyog, Grameen Samogri, Grameen Knitwear Ltd, Grameen Shiksha, Grameen Capital Management Ltd, Grameen Trust, Grameen Health Care Service Ltd, Grameen Shakti, Grameen Fabrics and Fashion Ltd etc have grown. They are all registered under the country’s Companies Act and pay their taxes and duties regularly.

Hard labour, credibility and commitment to the society had finally brought laurels to both professor Yunus and his Grameen Bank. Finally both were jointly awarded the Nobel Peace Prize in 2006 and the entire country witnessed a sudden explosion of pride and joy. Even the Asian region joined in celebrating the occasion and a new icon was thus born.

But this might have pained somebody in Bangladesh and that pained person was none other than the Bangladesh Prime Minister.  Ms. Hasina believed that it was actually she, who should have been awarded with the Nobel award, as she initiated for the historic Chittagong Hills Tracts Peace Accord in 1997 that ended the decade long infighting in southern Bangladesh.

The annoyance of Ms. Hasina was aggravated when professor Yunus announced a plan to run for politics in 2007. He even decided to form a political party named Nagarik Shakti (citizen’s power) and appealed to the people to come forward for a corruption free and prosperous Bangladesh.

However, this did not work and professor Yunus rolled back his ambitious plan. “I am no longer interested in politics. The chapter is totally closed today,” said professor Yunus. Talking to this writer recently in Dhaka, professor Yunus also clarified that he was no longer a political threat to anyone in Bangladesh.

Even though professor Yunus has dismantled his plan to join politics, a gigantic Grameen family remains as a potential threat to any political party in Bangladesh. The entire Grameen family may comprise nearly 20% of the population of the country, who are definitely educated and politically conscious and professor Yunus has emerged as a Godlike personality to those poor (or ex-poor) Bangladeshi families.

Ms. Hasina was waiting for her turn to condemn professor Yunus and took the opportune moment when the controversy of ‘illegal’ fund transfer among Grameen companies arose. It started with a documentary telecast through Norwegian television in November last year, where it was alleged that professor Yunus illegally transferred USD 48 million of aid money (from foreign grants of Norway, Sweden, Germany and the Netherlands) to its sister concern Grameen Kalyan. Later, of course, the allegation of transferring of funds from the Grameen Bank to other companies with ill motives was found baseless. The issue was resolved years back.

However, a section of Bangladeshi media highlighted the controversy in a biased way. The media even targeted professor Yunus as the beneficiary of the exercise, which Grameen authority strongly denied. The situation was exploited by Ms. Hasina to attack professor Yunus personally. She even alleged that professor Yunus has tainted the image of Bangladesh.

It was not the end of the road of the political vendetta against professor Yunus. Suddenly the Bangladesh Finance Minister AM Muhith alleged that professor Yunus was illegally occupying the post of Managing Director of Grameen Bank for almost ten years. The minister argued that professor Yunus who is now 70 years old is over aged to run the Managing Director’s office as the Bangladesh Service Rules 1993 specifies 60 years as the mandatory retirement age for all executives.

All of a sudden, the Bangladesh Central Bank had ordered on March 2 the removal of professor Yunus from the Grameen Managing Director office. The statutory bank administrator indicted that Grameen Bank did not receive approval when professor Yunus was reappointed by the Grameen directors in its July 20, 1999 meeting.

Professor Yunus along with nine Grameen directors challenged the order of the central bank in the High Court. They argued that Grameen is neither a fully government bank nor a government sponsored institution. Unlike traditional banks, it is owned by mostly poor women of Bangladesh and they should have their say on their leadership matter.

However the court on March 8 dismissed the petitions and maintained the order of the central bank. The petitioners then appealed to the Supreme Court which on March 15 deferred the case till March 29. The apex court of the country adjourned the case once again and later deferred it to April 4. The Supreme Court too passed a verdict against professor Yunus in one petition leaving another appeal, petitioned by nine Grameen Bank directors with the apex court in pending. But it is widely assumed that professor Yunus has lost the legal battle against the Bangladesh government.

Soon after the court verdict, professor Yunus said that he only has concerns for the 8.3 million Grameen borrowers. He believes that their interest would not be ignored at any level. Of course the long time managing director expects that Grameen Bank will continue functioning properly as it has attained the status of a robust institution. Professor

Yunus also asserted that Grameen has many efficient and dedicated officials who will run the institution fairly well.

Talking to this writer recently from Dhaka, professor Yunus said that he sought a graceful exit from the bank as early as March of 2010, sending a personal letter to the Finance Minister AM Muhith, saying that he was ready to ‘hand over the responsibility of this organization to the second generation’.

In his letter to the minister, he proposed to step down from the post of Managing Director to be appointed non-executive Chairman of the bank board but the government did not respond.

The controversy over professor Yunus has already assumed a wider political dimension with Sheikh Hasina’s Awami League seeking to gather support from the millions of Grameen family members. Meanwhile, her bitter opponent Begum Khaleda Zia, the head of the Bangladesh Nationalist Party, is vying for the Grameen constituency to try to drive Hasina from power. Even an ally to Ms. Hasina government, Jatiya Party led by HM Ershad expressed total displeasure at the move to remove the Nobel Laureate in such a humiliating way.

“It is not to be forgotten that Dr Yunus and Grameen Bank are tied with one thread, which no one can untie,” said Jahangir Alam Sarker, a Dhaka based lawyer. He asserted that professor Yunus was removed without issuing any show cause notice, meaning that he was not given any opportunity to defend himself.

“Due to this episode, the respect of the common people for Dr. Yunus and Grameen Bank has multiplied. Bangladesh has to take such steps so that its image is not blemished. If we can not rise above our narrowness, in the days to come the development of the country will be hit hard for sure,” the lawyer added.

Meanwhile, the episode received media attention from various parts of the world. A number of international organizations and individuals appealed to the Hasina government to withdraw the removal order of professor Yunus. Friends of Grameen led by former Ireland President Mary Robinson and former World Bank President James Wolfensohn alleged that professor Yunus was subjected to a politically orchestrated vilification.

The United States of America was straight enough to show their irritation at Dhaka’s move to sack professor Yunus. The US Secretary of State Hillary Clinton even telephoned professor Yunus expressing her support. She also personally communicated with Ms. Hasina and expressed her concern on the developments.

A statement from Washington said, “Dr Yunus is a Nobel Prize winner, Medal of Freedom winner (2009) and Congressional Gold Medal Winner (2010). His public service is widely recognised and respected (worldwide) and civil society organizations because the Grameen Bank plays an important role in Bangladesh’s development and democracy.”

The US Assistant Secretary of State for South Asia Robert Blake had recently visited Dhaka and after meeting the Bangladesh Prime Minister, Blake, in a written statement said, “Professor Yunus has brought great honour for Bangladesh, and we in the United States have been deeply troubled by the difficulties he is currently facing.”

After the Supreme Court verdict on April 5, French President Nicolas Sarkozy declared that he would take up the issue with the Bangladesh government. He sent a letter to professor Yunus appreciating his initiative for enabling poor people in Bangladesh to ‘widely access credit and is admired and respected in France’.

Nava Thakuria