Nobel Prize Winner Yunus Resigns as Managing Director of Grameen

Nobel Laureate Muhammad Yunus
Microfinance pioneer Muhammad Yunus, center, emerges from the high court building after contesting the decision to remove him from his post at Grameen Bank, in Dhaka, Bangladesh, on March 3, 2011. Source: AFP/Getty Images

Nobel Laureate Muhammad Yunus resigned as managing director of Bangladesh’s Grameen Bank a week after the nation’s Supreme Court dismissed his appeal to remain as head of the microlender he founded.

Deputy Managing Director Nurjahan Begum will take over from Yunus until the board names a chief, Dhaka-based Grameen Bank said in an e-mailed statement yesterday. Yunus, 70, breached retirement norms by staying at the helm past age 60, K.M. Abdul Wadood, the central bank’s general manager for banking regulation and policy, said on March 1.

Differences between Yunus, who won the Nobel Prize in 2006 for his work in founding Grameen, and Prime Minister Sheikh Hasina’s government surfaced in December when Norwegian television reported misuse of aid to the lender. Grameen denied any wrongdoing. Yunus’s resignation may slow the lender’s growth, said Selim Raihan, associate professor of economics at Dhaka University.

“The absence of Dr. Yunus will be a big setback for Grameen Bank. The two are synonymous,” Raihan said in an interview yesterday. “The next chief must not only have skills, but sympathy for the organization.”

Yunus and nine directors of the bank challenged the Bangladesh central bank’s call in the High Court, according to a March 3 statement on Grameen’s website. The High Court on March 9 rejected an appeal made by Yunus and the directors of the lender challenging the central bank’s decision. The Supreme Court on May 5 also dismissed Yunus’s appeal.

‘Honorable Transition’

Finance Minister Abul Maal Abdul Muhith yesterday said the government will form a panel to find a replacement for Yunus.

“We want an honorable transition for the nation’s only Nobel laureate, who is the country’s pride,” Muhith told reporters.

Bangladesh’s government owns 25 percent of Grameen, Yunus said in March, while customers hold the balance. It lends to its 8.35 million clients, of which 97 percent are women and more than 112,000 beggars, using funds from its deposits.

The bank employs 26,000 people and has 2,565 branches across the South Asian nation, where the Asian Development Bank estimates almost half the population of 144 million lives on less than $1.25 a day.

Grameen has lent $10.3 billion since it began operations in 1976 and had a loan recovery rate of 97 percent as of the end of February, according to the lender’s website.

“I am taking this step without prejudice to the legal issues raised before the Supreme Court,” Yunus said in the statement. This will “prevent undue disruption of the activities of Grameen Bank.”

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