Muhammad Yunus, the Nobel laureate who pioneered small loans for the poor, is flouting Bangladesh retirement rules by serving as head of microfinance lender Grameen Bank, the central bank said, as a campaign to remove him intensifies.
Yunus, an often outspoken critic of Bangladesh's government, has been mired in controversy after revelations of an unauthorized transfer of bank funds and as the microfinance industry comes under attack for placing onerous conditions on borrowers that led to suicides in India's Andhra Pradesh state last year. Bangladesh's central bank in a letter to the Ministry of Finance said Yunus, 70, is contravening government rules that require retirement at age 60, a senior ministry official said Tuesday on condition of anonymity, citing the issue's sensitivity. The rules apply to Grameen Bank because it is 25 percent owned by the government.
Khondoker Muzammel Huq, chairman of Grameen, has received a copy of the letter, and presented it to a meeting of Grameen Bank on Monday. The meeting was adjourned without any decision. Yunus could not be immediately reached for comment on Tuesday. Grameen Bank, founded by Yunus in Bangladesh, sparked the worldwide development of the microfinance industry, which seeks to reduce poverty by giving small loans to the poor, often to start businesses. The bank currently has nearly 9 million borrowers, 97 percent of whom are women.
Yunus shared the 2006 Nobel Peace Prize with Grameen Bank for his success in alleviating poverty. Problems later emerged in the industry as a host of newcomers adopted a more commercial approach. Controversy swirled around Yunus after a Norwegian television documentary that screened in December accused him of transferring Norwegian development funds from Grameen Bank to another venture without prior approval in 1996. Behind the scenes pressure by the Norwegian Embassy in Dhaka resulted in the funds being transferred back to Grameen Bank in 1998.
{{/usCountry}}Yunus shared the 2006 Nobel Peace Prize with Grameen Bank for his success in alleviating poverty. Problems later emerged in the industry as a host of newcomers adopted a more commercial approach. Controversy swirled around Yunus after a Norwegian television documentary that screened in December accused him of transferring Norwegian development funds from Grameen Bank to another venture without prior approval in 1996. Behind the scenes pressure by the Norwegian Embassy in Dhaka resulted in the funds being transferred back to Grameen Bank in 1998.
{{/usCountry}}The Bangladesh government set up a committee in January to look into the allegations and submit a report in three months. A Norwegian investigation that was sparked by the documentary said the matter was resolved when the funds were returned in May 1998. Yunus is also facing a defamation trial in Bangladesh, where many believe he was a supporter of the former military-backed interim government. A local politician in northern Bangladesh accused Yunus in 2007 of defaming him in an interview in which Yunus said politicians were only motivated by money.
At the time of the remarks, Bangladesh was under a state of emergency and many politicians, including current Prime Minister Sheikh Hasina were behind bars on charges of corruption. An interim government backed by the country's influential military eventually handed over power to the elected government of Hasina in January 2009.