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US worried over Grameen Bank future

Posted by bangladesh

The United States on Sunday said it was 'deeply concerned' about the decision of the Bangladesh government 'to give the government-appointed chairman of the Grameen Bank Board control over the selection of the bank's new managing director.'

"This move would diminish the role the largely female borrower-shareholders play in shaping the direction of an institution that has made a difference to millions of impoverished women in Bangladesh, and indeed around the world," said a press statement released by the Press Relations Office of the US Department of State.

The statement also referred to the visit the Secretary of State Hillary Clinton made to Bangladesh in May, urging "Prime Minister Sheikh Hasina and Foreign Minister Dipu Moni to take no actions that would undermine Grameen Bank."

"We are concerned that the latest actions by the government could threaten the future of the bank, which was founded by Nobel Peace Prize Laureate Professor Muhammad Yunus," said the statement issued by Acting Deputy Spokesperson of the Office of Press Relations Patrick Ventrell.

"We call on the Government of Bangladesh to respect the integrity, effectiveness, and independence of Grameen Bank.

"We urge the Bangladeshi Government to ensure transparency in the selection of a new managing director who has unquestioned integrity, competence, and dedication to preserving Grameen Bank, its unique governance structure, and its effectiveness in bringing development and hope to 8.3 million of Bangladesh's most vulnerable citizens, mostly women," read the statement.

The statement came after the Cabinet led by Prime Minister Sheikh Hasina on Aug 2 approved a draft of 'Grameen Bank Ordinance (Amendment) 2012' to change the legal provision for appointing Managing Director.

The government move is seen as an attempt to tighten its control over Grameen Bank by expanding the power of the government-appointed chairman to choose its Managing Director. Currently, that power resides with the bank's board of directors, which is made up of Yunus supporters.

The Cabinet also decided to investigate whether Yunus had enjoyed tax exemption in his stint as chief executive and how much money he made in salaries and allowances after he turned 60.

The central bank said in the past that he had violated retirement laws by failing to relinquish control at 60 but an official government enquiry cleared him of any wrongdoing.

Since the bank was founded in 1983 through a martial law ordinance, Yunus had been its Managing Director. In 2006, he shared Nobel Peace Prize with the bank, prompting Bangladeshis, Hasina among them, to hail him despite criticisms over the loan recovery process of the bank through weekly instalments.

When a TV documentary showed in December 2010 that he had channelled Tk 7 billion aid meant for the Grameen Bank to a sister concern of the bank without informing the donor, Prime Minister Sheikh Hasina had called Yunus a 'bloodsucker of the poor'.

The 72-year old, who made an abortive foray into politics during the emergency rule and has been an outspoken government critic, made an appeal to the people to save the microlending institution after the Cabinet decision.

"I have been expressing my apprehension beforehand. Now my fear is becoming real. I'm very sad we couldn't succeed to stop the process," he said in a statement.

Yunus was questioned by the central bank for continuing in his job far beyond the retirement age for any executive in any such institution in Bangladesh. Yunus was nearly 71 when the Bangladesh Bank gave the notice in March 2011.

He went to the court and lost a series of legal battles, finally in the Supreme Court, eventually losing his hold on the institution.

Following his removal, the government refused to bow down to pressure from US and international donor organisations to reappoint Yunus. It also ruled out a proposal to form a committee, led by Yunus, to look for a new Managing Director.

In February this year, opposition BNP said Hasina ridiculed Yunus by proposing him as the World Bank chief in a meeting with a delegation of European MPs in Dhaka.

Yunus, who counts Hillary, former US President Bill Clinton, former French President Nicolas Sarkozy and former Ireland President Mary Robinson, among his many friends, refused the idea.

Speaking on BBC's HARDtalk last week, Hasina denied allegations that her government had forced Yunus out of his role in Grameen Bank after he tried to float an independent political party in 2007.

Her claim that the bank charged 30-45 percent interest was contested by the bank on Jul 31. The Bank said it charged 7 percentage points less interest than the government-fixed ceiling and that her remark was 'inconsistent with actual figures'.

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