A proposal approved on Thursday by the Cabinet amends the Grameen Bank Ordinance 1983 which reduces the power of the bank’s board and gives more authority to the chairman for picking the managing director of the microfinance institution.
The majority of the bank’s shares and board seats are currently held by female Grameen Bank members, who have benefitted from taking out microfinance loans to form small businesses in order to lift themselves out of poverty.
In the amendment, the government-appointed chairman of the bank, in consultation with the board, will now prepare a three-member panel for the Bangladesh Bank’s (the central bank’s) consideration in appointing the managing director.
In addition, the candidate for managing director of the Grameen Bank must have expertise in the field of rural economy, finance, or in particular microfinance.
“The (proposed) amendment will make it easier to get the right candidate as the bank’s managing director and this will speed up the appointment,” said Cabinet Secretary M Musharraf Hossain.
Muhammad Yunus, founder and ex-managing director of the bank before he was dismissed over a dispute on exceeding retirement age, had always feared the possibility of the government taking over the bank. This had prompted U.S. Secretary of State Hillary Clinton’s support for Grameen Bank’s independence.
“Now my apprehension has started to become a reality. I am so disheartened that I am unable to express my feeling,” said Yunus in a statement hours after the amendment, reported by The Daily Star.
Currently, Mohammad Shahjahan is the Acting Managing Director and CEO of Grameen Bank.
Photo from Yunus Centre.
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