The central bank of Bangladesh, the Bangladesh Bank, has removed Nobel Laureate Dr. Muhammad Yunus as the Managing Director of Grameen Bank.
The microcredit pioneer won the Nobel Peace Prize in 2006 along with the Grameen Bank, which he founded.
However, Grameen Bank's General Manager Jannat-e-Kownine told a news conference that Dr. Yunus would continue in office and that he would challenge the central bank order.
The central bank had earlier sent a letter to the Grameen Bank Board informing it was not consulted when Dr. Yunus was appointed MD in 2000 for an indefinite period. The central bank expressed the opinion that Dr. Yunus, now 70, had passed the retirement age of 60 years and must step down.
However, sources in Grameen Bank say its MD does not have a retirement age as it is governed by a different set of rules under the Grameen Bank Ordnance of 1983, and the retirement age of its chief is decided by its governing body.
Under the Bank Company Act, the central bank is empowered to take legal action against a Director or Managing Director of any commercial and specialised bank for working against the interests of the depositors.
Dr. Yunus faced serious controversies after a Norwegian television documentary last year alleged diversion of the bank's funds to a partner organisation, the Grameen Kalyan Fund. The Norwegian government later cleared Dr. Yunus of any wrongdoing.
Finance minister AMA Muhith confirmed receiving a central bank letter which termed the holding of office by Dr. Yunus as illegal.
According to the Finance Minister, the government had asked Dr. Yunus to stay away from the bank till a review of the Grameen Bank is over. But Dr. Yunus reportedly rejected the suggestion and said the Grameen Bank would collapse in his absence.
“I don't think Mr. Yunus can run Grameen Bank throughout his life,” said the Minister and added the relevant law did not allow anybody to stay in the same post for so long.
The media and civil society leaders seemed divided over the issue, some supporting the Nobel Laureate and others demanding his exit as per rule or “showing high moral standard” from the institution he has been heading since its establishment in 1983 .
Media supporting Dr. Yunus reported that the Sheikh Hasina government was attempting to “oust Yunus from the Grameen Bank”.