Bangladesh increases control over Grameen

DHAKA - Bangladesh has passed a law which allows the government greater power to anoint the successor to Muhammad Yunus, the founder of Grameen Bank, in a move critics say weakens the famed micro-lender’s independence.

By (AFP)

Published: Thu 23 Aug 2012, 9:34 PM

Last updated: Fri 3 Apr 2015, 9:53 AM

Under the law, which was passed by a presidential decree late Wednesday, the government-picked chairman of Grameen will form a committee to find three candidates for the post of managing director, bypassing the bank’s own board.

The bank’s 12-member board, which includes nine women directors who are also borrowers, must then pick one of the short listed candidates to succeed Yunus in the top-job.

The move comes despite criticism both at home and abroad that the government is seeking to undermine the independence of the bank, the majority of which is owned by more than eight million poor women borrowers.

Speaking to AFP, Yunus, who shared the 2006 Nobel Peace Prize with Grameen Bank for giving billions of dollars of collateral free loans to poor Bangladeshi women, said “It’s the beginning of the end of Grameen Bank.”

The 72-year-old, who fell out with Prime Minister Sheikh Hasina after talking about going into politics, was officially fired last year for exceeding the mandatory retirement age of 60. He challenged the move in court but lost.

“It’s a black day for the nation. I can’t find any language to express my sorrow,” he said, adding the move would mean the bank lost its “uniqueness”.

Law Minister Shafique Ahmed told reporters Thursday, however, the new law would make the recruitment process “transparent and acceptable”.

Finance minister A.M.A Muhith also rejected criticism that the move would lead to a government takeover of the bank, accusing Yunus of waging a “harmful” campaign against the country.

In nearly three decades as the head of Grameen Bank, Yunus helped lift millions of rural poor out of poverty and empowered women in a conservative Muslim-majority country. Poor borrowers own 97 percent stake of the bank.

He is seen as one of the world’s leading anti-poverty activists and has many powerful foreign supporters.

In a statement, leading Bangladeshi female professionals said they were “deeply shocked and saddened” at the government interference in Grameen, saying “this represents a de facto imposition of government control of the bank.”

“Through this amendment, the Government aims to deny the owners of Grameen Bank their right to have a say in the management of their bank,” they said.

The United States earlier this month voiced deep concern about the Bangladeshi government’s expanding role in Grameen, saying the move would diminish the role of millions of female borrower-shareholders.

US Secretary of State Hillary Clinton, a personal friend, heaped praise on Yunus during a visit to Dhaka in May and urged Hasina’s government to maintain “an environment where civil society groups operate freely”.

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