BB SACKS YUNUSBank flouted norms, admits GB chairman

Hours after the central bank's order removing Yunus as the Grameen Bank MD and the bank's denial of any wrongdoing, the GB chairman admits it did violate the rule book.

bdnews24.com
Published : 2 March 2011, 09:46 AM
Updated : 2 March 2011, 09:46 AM
Dhaka, March 2 (bdnews24.com) — Bangladesh Bank's claim that recruitment of Muhammad Yunus as managing director of Grameen Bank (GB) was not done following its approval is correct, admits the GB chairman.
Grameen Bank chairman Khondoker Muzammel Huq spoke to bdnews24.com on Wednesday afternoon, hours after the central bank relieved Nobel laureate Yunus of his duties.
Quoting the central bank's letter, he said, "Bangladesh Bank in its letter said Muhammad Yunus was relieved of his duties as the Grameen Bank managing director, since it did not take central bank's approval for his re-appointment as the managing director last time."
The GB chairman told bdnews24.com, "Recruitment of managing director is done by the board of directors. But Bangladesh Bank's approval is necessary in this regard. The directives were not followed in his last reappointment."
Asked if someone would be appointed in his position, Mozammel said: "First we need to hold a board meeting."
However, claiming that the GB had been following recruitment rules properly, Grameen Bank general manager (information and media) Jannat-E-Quanine told a press conference, "According to the bank's legal experts, founder of Grameen Bank and Nobel laureate Muhammad Yunus is continuing in his office."
Yunus had been holding the position since 1983.
In its letter, Bangladesh Bank said: "Since the reappointment of Prof Muhammad Yunus was made without taking approval of the Bangladesh Bank, in line with Section 14 (1) of the Grameen Bank Ordinance-1983, it is not legal for him [Prof Muhammad Yunus] to hold the position of managing director of Grameen Bank and perform duties in this capacity."
The Section 14(1) of the bank says, "There shall be a managing director of the bank, who shall be appointed by the board with prior approval of the Bangladesh Bank."
"So, for violating Section 14 (1) of Grameen Bank Ordinance-1983, Prof Yunus has been relieved from the position of managing director of Grameen Bank," it added.
The letter, addressing secretary of the bank, and secretary of the banks and financial institutions division of the finance ministry, also suggested initiating proper steps in the matter.
Finance minister Abul Maal Abdul Muhith had on Tuesday confirmed receiving a central bank letter terming holding of office by Yunus illegal.
On Feb 15, Muhith told BBC that Yunus should resign from his position at Grameen Bank. "He has even reached the (retirement) age limit for holding the office of a private bank chief."
He also pointed out that 70-year-old Yunus had already exceeded the age limit, and said that it was time for the Nobel laureate to step down. "No one can stay in an organisation forever."
Yunus hit the headlines after Norway's national TV NRK aired a documentary on November 30, titled "Fanget i Mikrogjeld" or "Caught in Micro debt", based on which bdnews24.com ran a report on December 1.
According to the documentary, Yunus transferred funds destined for Grameen Bank to Grameen Kalyan, which was in no way involved with micro-credit operations.
Responding to the allegations, Grameen Bank claimed there was no wrongdoing in the agreement between the bank and Grameen Kalyan, under which it received Tk 3,917 million from Grameen Bank.
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