Bangladesh finance minister wants Grameen Bank to be more 'relevant'

The government has started the process to 'revive' Grameen Bank so that it can play a new role, Finance Minister AMA Muhith says.

"Despite Mr Yunus' (founding managing director) hindrances, we are thinking about Grameen Bank. We should revive it.

"I have already commissioned certain people to look into the issue, how to create a new role for Grameen Bank," he told reporters on Sunday.

"Grameen Bank Chairman Shamsul Bari was quite reluctant over it, but he has accepted this challenge and started working on it," said the finance minister.

He added Bari, who had been with the bank when it was founded, is close to Muhammad Yunus.

A former Chittagong University professor, Yunus had been the managing director of Grameen Bank since its inception in the 1980s. He shared the Nobel Peace Prize with the bank in 2006.

The government holds 30 percent stakes in it.

Bangladesh Bank sacked Yunus in 2011 on the ground that he had crossed the official age limit. Yunus had challenged his dismissal in the top court but lost.

The Nobel laureate's relationship with the government has been on shaky ground since then and at times it leads to heated exchanges.

Muhith had been saying for long that they were unable to take any decision because of Yunus as he influences the decisions even after his removal.

On Sunday, he said, "We have done nothing on it for long. But not anymore, it needs to be fixed."

Muhith said he was in favour of discontinuing the weekly instalment for paying back loans.

"The rate of default (loans) is now 10 percent or it may be less than that. It was over 40 percent in 1982, when I became a minister for the first time. Now it's something between 8 and 10 percent. It should be lesser."

The finance minister said the two main objectives of Grameen Bank have been achieved. "Credit is the right to the poorest and regularising the habit of payment; these two have been achieved."

There are many other microcredit programmes in the country now, said Muhith. "Grameen Bank was the pioneer, now it needs to be made relevant."