HC questions why Grameen Bank interest rates differ from commercial Banks

The High Court has issued a rule asking why the interest rate of Grameen Bank's microloans will not be made consistent with that of commercial banks in the country. At the same time, former Managing Director of Grameen Bank Muhammad Yunus has been named as a defendant and multiple charges including abuse of power and tax evasion have been presented against him.

After the initial hearing of a writ case filed in public interest, a bench of Justice Khizir Ahmed Chowdhury and Justice Md. Ziaul Haque issued this rule on Monday. Senior Supreme Court lawyers Masud R. Sobhan and Fatema Chowdhury heard for the writ petitioner.

Lawyer Fatema Chowdhury said that the court has issued the rule on two issues. First, why should Bangladesh Bank not be ordered to adjust the interest rate of about 20 percent on Grameen Bank's general microloans to that of commercial banks. Second, why should the same facility not be given to Grameen Bank as there is for loan exemption if you take a loan of 100 taka from a commercial bank and repay 300 taka? The writ petition states that since there is no such facility in the Grameen Bank Act, landless borrowers continue to repay for years but cannot get out of debt. However, the lawyer said that no interim order has been given in the case.

The writ petition states that the interest rate on Grameen Bank's microloans is 'extremely high and exploitative' and requests the court to order Bangladesh Bank to reduce this rate. The defendants in the case are the Governor of Bangladesh Bank, the Secretary of the Ministry of Finance, the current Managing Director of Grameen Bank and former Managing Director and current Advisor Muhammad Yunus.

The writ petition raises several serious allegations against Yunus. Although the ordinance stipulates that he should leave office at the age of 60, he is accused of 'influencing' the then Finance Minister M Saifur Rahman to stay in office for another five years. After that, when he demanded appointment for another term even after he was over 65, the Finance Ministry rejected it and he lost the legal battle in the High Court and Supreme Court. The writ claims that he has been determining the bank's policies since then as an 'advisor'. There are also allegations of refusing to pay taxes by forming a trust fund with close relatives using Grameen Bank's profits, although the authorities were eventually able to collect them.

The most serious allegation is that the National Board of Revenue suddenly waived off the income tax of 6.77 billion taka, or about $55 million, accumulated by Grameen Bank in 2025, while Yunus was the chief advisor to the interim government, for which there was no legal basis, the writ claims. It has been called a 'clear example of abuse of power for financial gain'. It has also been alleged that a large number of Grameen Bank employees were deprived of their fair rights, although the bank was eventually forced to pay the dues after the workers' union won a case in the labor court.

It is worth noting that Muhammad Yunus was the Managing Director of Grameen Bank for 28 years since its establishment in 1983. Grameen Bank and Yunus were jointly awarded the Nobel Peace Prize in 2006 in recognition of their efforts to alleviate poverty through microfinance. He was removed from the post of Managing Director during the previous Awami League government on the grounds that he had passed the retirement age. Later, after the mass uprising on August 5, 2024, an interim government was formed under the leadership of Yunus, and the previous verdict against him was later overturned.