Bangladesh plans law change to allow government appointment of Grameen Bank managing director | iNFOnews | Thompson-Okanagan's News Source

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Bangladesh plans law change to allow government appointment of Grameen Bank managing director

DHAKA, Bangladesh - Nobel laureate Muhammad Yunus says Bangladesh's latest move to expand the power of the government-appointed chairman at the pioneering Grameen Bank he founded could hurt the millions of poor borrowers who own 97 per cent of the lender.

Government spokesman Musharraf Hossain Bhuiyan said a proposed law change approved Thursday by Prime Minister Sheikh Hasina's Cabinet would allow the bank's chairman to appoint its managing director. That authority is now held by the bank's board of directors, who are mostly Yunus supporters.

Yunus and the Bangladeshi government have been at odds for several years over the running of Grameen Bank, which pioneered giving small loans to the very poor. A government-appointed investigation found that Grameen Bank violated its charter as a microlender by creating affiliates that did not benefit the bank's shareholders, and recommended the government merge those businesses with the bank. Yunus maintains those businesses are independent and should remain so.

Grameen has been without a managing director since last year after the government ousted Yunus, 71, for breaching regulations that set the retirement age of officials at 60.

Yunus said in a statement that enlarged powers for Grameen's chairman will pave the way for the government to take control of the bank.

"I am very disheartened to see that the poor people are being deprived of the ownership of the bank," he said. "I had always apprehended this. Now my apprehension is going to be a reality."

"The government's decision will destroy the bank of the poor and the country's bank of pride," he said.

Garmeen was a trail blazer in extending small loans to the poor as a way of overcoming poverty, earning it and Yunus the 2006 Nobel Peace Prize. It has about 9 million borrowers, mostly women.

Thursday's Cabinet meeting, chaired by Hasina, also asked the Ministry of Finance to investigate what salaries and benefits Yunus received during his term as the bank's managing director past his retirement age of 60 and if those were given in line with rules.

It also asked the ministry to find out if Yunus received any foreign currency from abroad as a government official and enjoyed any tax exemption.

The new orders came amid an investigation into 54 businesses linked to Grameen Bank.

That probe was ordered in May weeks after Finance Minister A.M.A. Muhith said the bank's board had not authorized most of the affiliates.

Earlier this year, U.S. Secretary of State Hillary Rodham Clinton urged Bangladesh's government to not to do anything that might undermine the effectiveness of the bank. Muhith later dismissed her remarks as unwarranted.

Yunus has had frosty relations with Hasina. She was reportedly angered by Yunus' 2007 attempt to form his own political party backed by the powerful army when the country was under a state of emergency and Hasina herself was behind bars.

News from © The Associated Press, 2012
The Associated Press

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