By IANS
Dhaka : Bangladesh's pioneering rural banking network Grameen has been given government approval to open branches in cities and raise money from the market through bonds and debentures but it would have to stick to distributing rural credit.
The Grameen bank, that shared the Nobel Peace Prize with its founder Muhammad Yunus last year, wanted to enter the urban banking sector.
However, the Khaleda Zia government had rejected the proposal last year. The government of Fakhruddin Ahmed is now rethinking the plan.
Necessary changes will be made to an ordinance issued in 1983 to give the authorization and the government will reduce its stake from 25 to 15 per cent under a proposal approved by the interim government Wednesday.
Sources said the micro-credit bank's management wanted to operate remittance activities through its urban branches but the secretarial committee did not endorse the proposal.
"Grameen will not be given permission for any sort of commercial transactions or remittance activities," a senior finance ministry official told the New Age newspaper.
Started by Yunus in the 1970s as a pioneering concept in rural credit focusing on women, Grameen has been emulated in 80 countries globally.