Bangladesh court to hear Yunus case

The Nobel laureate’s work spurred a boom in microfinancing across the developing world [EPA]

Bangladesh’s High Court will hear more arguments as it considers the legality of a government order dismissing Muhammad Yunus, Nobel laureate, as managing director of the pioneering microlender Grameen Bank, which he founded.

A ruling had been scheduled for Sunday but was delayed as lawyers for Yunus made more arguments. The government will respond to these arguments on Monday, Attorney General Mahbub-e-Alam said.

Bangladesh’s central bank ordered Yunus out of Grameen Bank last week, saying he was working in violation of the country’s retirement laws. However, Yunus, an outspoken government critic, has said the dismissal is illegal and has vowed not to leave the bank.

The government holds a 25 per cent share of the bank while the remainder is owned by its borrowers.

The central bank says that Yunus had been holding his post illegally as his reappointment in 1999 had not been approved by the central body, as is required under Bangladesh law.

But Yunus’s lawyers have argued that a 1983 law gives Grameen special status, exempting it from those rules.

“Yunus is appointed by the Grameen board of directors and only the board can fire him,” Rokanuddin Mahmud, Yunus’s lawyer said.

Grameen Bank, founded in 1983, pioneered the concept of reducing poverty by giving small loans to the poor.

His work spurred a boom in such lending across the developing world and earned him and the bank the 2006 Nobel Peace Prize.

Yunus, 70, has recently been under pressure at home, where he has long had frosty relations with Prime Minister Sheikh Hasina.

She has accused Grameen Bank and other microfinance institutions of charging high interest rates and “sucking blood from the poor borrowers”.

She reportedly was angered by Yunus’ 2007 attempt to form his own political party, backed by the country’s powerful army.

Controversy surrounded Yunus after a Norwegian television documentary in December accused him of transferring Norwegian development funds from Grameen Bank to another venture without prior approval in 1996.

Pressure by the Norwegian Embassy in Dhaka resulted in the funds being transferred back in 1998, and the Norwegian government has said there was no indication Grameen was engaged in corruption or embezzlement.

Grameen Bank currently has nearly 9 million borrowers, 97 per cent of whom are women. Many use their small loans to make ends meet or to start small businesses.

Nearly 40 per cent of Bangladesh’s 150 million people earn less than a dollar a day, the World Bank says.