Bangladesh Bank ‘sacks’ Yunus

Published by New Age, 3 March 2011 

Bangladesh Bank ‘sacks’ Yunus
Everything will be dealt with legally: Yunus

David Bergman and Abdullah Juberee 

The Bangladesh Bank has written to the chairman of the Grameen Bank informing him that Muhammed Yunus ‘has been relieved of the responsibilities of managing director of Grameen Bank.’
The Grameen Bank has, however, disputed the legality of the dismissal stating that the bank has ‘complied with the law in respect of appointment of the managing director’ and that ‘Nobel Laureate Professor Muhammad Yunus is accordingly continuing in his office.’
In a statement to New Age, the United States embassy in Bangladesh said that it was ‘deeply troubled’ by the Bangladesh Bank letter.
Concern was also expressed by the newly established group, Friends of Grameen, chaired by Mary Robinson, the former President of Ireland, who denounced the ‘new attempt of destablisation against Professor Yunus’.
In the letter, KM Abdul Wadud, the general manger of the banking regulation and policy department of the Bangladesh Bank stated that he was dismissed because the ‘reappointment of Professor Muhammad Yunus as managing director did not have prior approval of Bangladesh Bank as per Section 14(1) of the Grameen Bank Ordinance 1983.’
Section 14 (1) of the ordinance states: ‘There shall be a managing director of the bank who shall be appointed by the board with the prior approval of the Bangladesh Bank.’
The letter goes onto say that because of the lack of approval by the Bangladesh Bank, ‘Muhammad Yunus’s continuation of the discharge of his duties as managing director is not valid.’
It is not stated when the ‘reappointment’ of Muhammad Yunus by Grameen is supposed to have taken place.
Wadud says in the letter that ‘the order has been issued on approval of proper authorities’ and ends by suggesting to the chairman that he should ‘take proper action in this regard.’
On Tuesday, Wadud had told New Age, ‘The Grameen Bank Ordinance 1983 was created by the finance ministry. It is their responsibility to take action.’
Wadud’s mobile was not receiving calls on Wednesday.
In the past, the Bangladesh Bank was not involved in the regulation of the Grameen Bank but in recent years it has been slowly taking over the supervision of the bank, according to an official.
Mozammel Huq, the chair of Grameen Bank appointed by the government, told New Age that in his view there was nothing more for him to do and Yunus’s dismissal was ‘complete.’
He said that everything should now operate through due process of law.
He referred to Section 14(5) of the 1983 ordinance which states, ‘If a vacancy occurs in the office of the managing director, or if the managing director is unable to discharge the function of his office on account of absence, illness or any other cause, such officer of the bank as may be prescribed by regulations should discharge the function of the managing director until [the appointment] of a new managing director….’
He said that the senior most manager of the Grameen Bank, deputy managing director Nurjahan Begum, should now take over the position of the managing director.
‘All is defined in the law. I do not need to take any action,’ Muzammel told New Age
One of the country’s most senior lawyers, not involved in any of the current litigation involving Muhammad Yunus, questioned the bona fide intention of the Bangladesh Bank’s action.
Supreme Court lawyer M Zahir told New Age, ‘After so many years, they are coming and saying this? The Bangladesh Bank knew very well that Yunus was the managing director and now they are suddenly waking up and saying that he does not have the sanction. It is not bona fide.’
‘If the Bangladesh Bank allowed Yunus to continue as managing director all these years, why should he not have assumed that it approved of his appointment,’ he added. ‘The assumption must be that the Bangladesh Bank is satisfied with Yunus’s appointment.’
‘Why, I ask, did the Bangladesh Bank wake up so late and why against such a person as the Nobel laureate?’
Another senior lawyer who did not want to be named asked why the Bangladesh Bank did not send a ‘show cause notice’ to Muhammed Yunus before dismissing him.
In its statement, the US embassy added that it was ‘following developments closely and is waiting for clarification from the government of Bangladesh. ‘We hope that a mutually satisfactory compromise can be achieved that will ensure the Grameen Bank’s autonomy and effectiveness.’
The United States had been strongly urging the Bangladesh government against forcing Muhammed Yunus from office.
The Grameen Bank said that it is taking legal advice and examining all the legal aspects of this issue. ‘The Grameen Bank has been duly complying with all applicable laws,’ it added in its statement.
This letter sent by the Bangladesh Bank follows a similar letter that it had sent to the Grameen Bank chairman and which was presented to the Grameen Bank board meeting on Monday.
Following that letter, Jannat-E-Quanine, general manager of the Grameen Bank, had issued a statement saying, ‘There is no directive on Professor Yunus to cease functioning as managing director nor is there any suggestion of his being removed from this post.’