Nobel laureate Muhammad Yunus forced out of his bank

Bangladesh’s central bank ordered his removal after accusations he violated the country’s retirement laws, according to Private Desh TV and Bangla Vision Television.

Nobel laureate Muhammad Yunus giving a speech on Social Business and Microcredit Systems at the first Responsibility Forum of India' in Mumbai. File photo: PTI.

Nobel laureate Muhammad Yunus has been forced from his position as head of the microfinance lender he founded, Grameen Bank, television stations reported on Wednesday.

Bangladesh’s central bank ordered his removal after accusations he violated the country’s retirement laws, according to Private Desh TV and Bangla Vision Television. The government owns a 25 percent stake in Grameen, which lends small amounts of money to the poor and spurred similar lending practices worldwide. The innovation won Mr. Yunus the 2006 Nobel Peace Prize, which he shared with the bank itself.

The central bank has claimed that Mr. Yunus - a longtime critic of the government - violated the country’s retirement laws by staying on as Grameen’s head well past the mandatory retirement age of 60. Mr. Yunus is 70.

Grameen Bank says the normal retirement rule does not apply to it as the bank is run under a special 1983 law. Mr. Yunus was appointed managing director of the bank for an indefinite period in 2000 when he reached 60, the bank says.

Mr. Yunus could not be immediately reached for comment on Wednesday.

Mr. Yunus has been mired in controversy after revelations of an unauthorized bank transfer and as the microfinance industry comes under attack for placing onerous conditions on borrowers that led to suicides in the Indian State of Andhra Pradesh last year.

Controversy swirled around Mr. 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.

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.

Mr. 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 Mr. Yunus in 2007 of defaming him in an interview in which Mr. 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 Ms. Hasina in January 2009.