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Thursday , March 3 , 2011
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Order to remove Yunus

Dhaka, March 2: Nobel laureate Muhammad Yunus has been removed as the managing director of Grameen Bank, the organisation he founded in Bangladesh in 1983 to help the poor.

The central bank has cited a rule that requires retirement at 60 to order the ouster of the 70-year-old “banker to the poor” who has been embroiled in a Norwegian funds scandal.

Yunus had also fallen out with the political establishment after, fresh from the Nobel victory, he made disparaging remarks about politicians and mooted a party to weed out the corrupt.

Sheikh Hasina, who rode a landslide to power and became Prime Minister, had termed Yunus a “blood sucker” for charging high interest rates for the poor.

Grameen, credited with revolutionising micro-credit by offering small loans to nearly 8.3 million borrowers to start small businesses or make ends meet, has said Yunus continues to be the managing director. But the government-appointed chairperson said he had been removed with immediate effect.

The Bangladesh Bank, the country’s financial regulator and owner of 25 per cent stake in Grameen, issued the order to remove Yunus.

The apex bank said the Nobel Peace Prize winner had been “relieved of his responsibilities as managing director of Grameen” for “non-compliance” with the institution’s retirement rules. The Bangladesh Bank’s letter indicated that Yunus violated Article 14(3) of the Grameen Bank Ordinance, which sets an age limit of 60 for the managing director.

The Yunus camp insists that Grameen’s board, which is mainly made up of borrowers, allows him to stay on as long as he is able to perform his duties.

“The legal process will be followed, the law will determine what happens,” Associated Press quoted Yunus as saying after he emerged from his lawyer’s office.

Grameen also stressed the legal point but added that Yunus continued to be the managing director. “This is a legal issue as stated by the finance minister himself. Grameen Bank is taking legal advice. According to the bank’s legal advisers, the founder of Grameen Bank, Nobel Laureate Professor Muhammad Yunus, is continuing in his office,” said general manager Jannat-E-Quainine in an email statement.

But Grameen’s government-appointed chairperson Muzammel Huq told Reuters: “Today I received the letter from the central bank and I was directed to implement the decision. The decision has been implemented with immediate effect.”

Yesterday, finance minister A.M.A. Muhith had said his ministry had received a letter from the central bank stating that it is illegal of Yunus to hold on to the post of the managing director.

The latest move came after Yunus and his micro-credit operations came under severe criticism from various quarters. Prime Minister Hasina had ordered an investigation against the Nobel laureate.

A Norwegian television documentary late last year accused Yunus of transferring Norwegian development funds from Grameen Bank to another venture without prior approval in 1996.

Although the Norwegian government has said there was no indication of corruption, the funds were being transferred back in 1998. This had strengthened perceptions that some rules were flouted.

Last month, Yunus was asked to leave on his own by the finance minister who had initially tried to defend the Nobel laureate.

However, supporters of Yunus, including former Irish President Mary Robinson who is leading an international “Friends-of-Grameen” effort to protect Yunus and his organisation, said the criticism against the Nobel winner was “politically orchestrated”.

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