Bangladesh Bank on Wednesday removed Nobel Peace Prize winner Dr Muhammad Yunus from the post of managing director of Grameen Bank.

A BB letter to the Grameen Bank’s board said it did not take approval from the authorities when it reappointed Yunus the bank’s MD on 12 March 1999 for an indefinite period, which violated the Grameen Bank Ordinance 1983.

Yunus was already 60, the government-fixed age limit for retirement.

The decision of Yunus’ removal came following criticism he has been facing at home and abroad after a Norwegian television aired a documentary exposing that Yunus diverted funds meant for poor people to another venture, Grameen Kalyan.

BB General Manager KM Abdul Wadud in the letter said appointment of the MD to the pioneering microcredit agency requires the Grameen board to obtain the central bank’s prior approval, which it failed to do.

“There shall be a Managing Director of the Bank who shall be appointed by the Board with the prior approval of the Bangladesh Bank,” stipulates the provision of the Grameen Bank Ordinance 1983.

Receiving the letter, Grameen Bank Chairman Khondaker Muzammel Huq called a meeting of the board on coming Sunday. He said the regulator’s decision was conveyed to Yunus.

The BB also directed the Grameen Bank chairman to take necessary steps regarding Yunus’ removal.

“At the meeting we will inform other members of the board about the Bangladesh Bank directives,” he said.

Meanwhile, the Grameen information and mass media coordinator in a press release said the removal of Yunus is a legal issue and Grameen Bank is consulting with its lawyer.

“Grameen Bank has consistently been abiding by the law,” said the release signed by Grameen’s General Manager Jannat-e-Quanine.

It claimed that the Grameen authority followed proper procedures to appointment Yunus as its MD.

Officials of Grameen Bank said Dr Yunus might file a writ petition against the central bank’s decision.

Bangladesh Bank had sent a letter to the finance ministry, saying Yunus should be removed from Grameen Bank he had founded in 1983.

At Grameen Bank’s last board meeting, the chairman read out the letter, which said Yunus no longer could stay as the chief executive of the bank because its retirement age is 60.

A Bangladesh Bank official said the finance ministry could not remove Yunus because the govern-ment holds 25 percent stakes in the micro-lender. The move comes as Yunus faces intense pressure from the government to quit his post.

In early February, Finance Minister AMA Muhith asked the Nobel laureate to go.

The government also formed a review committee to look into the matter.

Prime Minister Skeikh Hasina accused Yunus, who briefly set up his own political party during the military-backed caretaker government in 2007, of using “tricks” to avoid taxes and “sucking blood of the poor” through his microcredit organisation.

Grameen Bank is widely regarded as the pioneer of micro-finance, which consists of lending small amounts to the poor at rates slightly higher than other banks without collateral. The system, praised for reaching those who are excluded from normal commercial credit, has come under criticism in recent years for encouraging debt and taking excessive profits.

News: Daily Sun/ Bangladesh/ Mar-03-2011