Eminent economist and Nobel winning banker to the poor professor Muhammad Yunus has been virtually driven out from the Grameen Bank of Bangladesh, with which he shared the Nobel peace award in 2006. Recently the Bangladeshi apex court gave a verdict ousting Yunus from the prestigious institution, which he founded almost three decades back for the benefit of poorest women borrowers.

Grameen Bank was in the global spotlight with a micro-finance model that brought access to formal finance to as much as 20 percent of Bangladesh’s poor.

But Bangladesh prime minister Sheikh Hasina was waging a campaign for months now to drive him out of the bank, apparently because of jealousy. The action however stirred concern among international investors, who have only relatively recently begun to look favorably at Bangladesh because of its economic reforms and with the health and welfare of its 140 million citizens steadily improving.

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

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

Micro lending, pioneered by Yunus, has spread rapidly across South Asia, particularly in India.  After experimenting with micro lending on a small scale, he created Grameen, literally meaning village bank, in 1983.  The bank gained popularity and attracted the attention of economists, civil society groups and the international media, giving collateral-free small loans, offering ownership to the beneficiaries and insisting on social empowerment of the borrowers.

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 board of directors. The government appoints the chairman and two board members for the 13-member team, where 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 loan to the disabled, blind and older people, who can go for sale various items door to door. Since 2002, Grameen bank has disbursed over Taka 153 million, of which 78% amount 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 Prof Yunus and his Grameen bank. Finally both were jointly awarded with Nobel Peace Prize in 2006. The entire country witnessed a sudden explosion of pride and joy everywhere. Even the Asian region joined in celebrating the occasion and a new Godly icon was already born.

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

Prof Yunus also earned Hasina’s enmity when he announced plans to form a political party called Nagarik Shakti (citizen’s power) in 2007 and appealed for the populace to come forward to create a corruption free and prosperous Bangladesh. However, the plan didn’t work and Yunus gave up politics almost as soon as he started.

“I am no longer interested in politics. The chapter is totally closed today,” Yunus told this writer in a telephonic conversation from Dhaka. He asserted that he is no longer a political threat to anyone in Bangladesh. In fact, soon after a Norwegian television station broadcast allegations of shady cross-corporate lending practices in the Grameen family of companies, Hasina pounced.

The documentary in last November alleged that Yunus illegally transferred USD 48 million of aid money from Norwegian government from the Grameen Bank to its sister concern Grameen Kalyan. Later, of course, the Norwegian government got convinced that the allegation was baseless.

But a section of Bangladeshi media highlighted the issue in a biased way. The media even targeted Prof Yunus as the beneficiary of the exercise, which Grameen authority strongly denied. The situation was exploited by Ms Hasina to attack Prof Yunus personally. She even alleged that Prof Yunus tainted the image of Bangladesh. It was not the end of the road for political vendetta against Prof Yunus. Suddenly the Bangladesh Finance minister AM Muhith alleges that Prof Yunus was illegally occupying the post of MD in Grameen bank for almost ten years. The minister argued that Prof Yunus, 70, was over aged to run the MD’s office, as the Bangladesh Service Rules 1993 indicates 60 as mandatory retirement age for all executives. All of a sudden, the Bangladesh Central Bank had ordered on March 2 the removal of Prof Yunus from the Grameen MD office. The statutory bank administrator indicted that Grameen bank did not receive approval when Prof Yunus was reappointed as MD in 1999 by Grameen’s board of directors.

The Grameen bank authority challenged the decision in the Bangladesh High Court arguing that Grameen is neither a fully government bank nor a government-sponsored institution. Unlike the traditional banks, Grameen is owned by mostly poor women of Bangladesh and hence they should have their final say in the leadership issue. But both the High court and Supreme court of Bangladesh gave verdict against Prof Yunus. Only one appeal, petitioned by nine Grameen bank directors is pending in the apex court, which also may not support the banker of deprived. “I have only concern for the 8.3 million Grameen borrowers. Their interest should not be ignored at any level,” Yunus said though he expected that Grameen bank  would continue functioning, as it has attained the status of a robust institution. He also asserted that Grameen has many efficient and dedicated officials who would run the institution fairly well. He said 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 he was ready to ‘hand over the responsibility of this organization to the second generation’.

In his letter to the Finance 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 Prof Yunus has already assumed a wider political dimension with Sheikh Hasina’s Awami League is 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 Hasina government, Jatiya Party led by HM Ershad expressed total displeasure at the move to remove the Nobel laureate in such a humiliating way.

The gigantic Grameen family remains a potential threat to any political party in Bangladesh. Yunus has attained near godlike status with the poor and ex-poor Bangladeshi families.

The episode meanwhile 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 Prof Yunus. Friends of Grameen led by former Ireland president Mary Robinson and former World Bank president James Wolfensohn alleged that Prof Yunus was subjected to politically orchestrated vilification. They vowed to save the bank from the Bangladesh government takeover. The United States of America was straight enough to show its irritation at Dhaka’s move to sack Prof Yunus. The US Secretary of State Hillary Clinton even telephoned Prof Yunus and expressed her support for him.

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 hadrecently visited Dhaka and after meeting the Bangladesh prime minister, Blake in a written statement said, “Prof Yunus has brought great honour for Bangladesh, and we in the United States have been deeply troubled by the difficulties he is currently facing.”

Soon 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 Prof Yunus appreciating his initiative for enabling poor people in Bangladesh to ‘widely access credit and is admired and respected in France’.