Muhammad Yunus, Bangladesh’s father of microfinance, called Aug. 23 a ‘black day.’ Photo by: Michael Wuertenberg / World Economic Forum / CC BY-SA

On Thursday, Bangladesh’s President Zillur Rahman signed an amendment giving Grameen Bank’s chairman more power over appointing a managing director, prompting the country’s father of microfinance to declare Aug. 23 a ‘black day.’

The contentious amendment had many concerned over the bank’s independence, even before the promulgation. The amendment is seen to give the government room to exercise influence over who will be the bank’s next managing director, a seat held for years by Muhammad Yunus.

“From now on, the bank owned by the poor women will be run with the direct or indirect influence of the government,” Yunus said in a statement.

More than 95 percent of the bank’s members are women, most of whom are extremely poor. Nine of 12 members of the board are women, who, before the amendment, shared responsibility for appointing the bank’s managing director.

Many have called on the government to not curtail the bank’s independence, including the United States. On Monday (Aug. 20), State Department spokeswomen Victoria Nuland said, “We are continuing to urge the Government of Bangladesh not to take any actions that would reduce the integrity or efficacy of the bank.”

Such calls, however, have fallen on deaf ears. A new committee that will be charged to search for the bank’s next managing director will be formed in a week’s time, Finance Minister Abul Maal Abdul Muhith told The Daily Star.

Under the amendment, the chairman and the rest of the board will discuss the setup of the committee. But the central bank-appointed chairman will have final say in case there are disagreements, Muhith said.

It remains to be seen what the implications of this change will be on the bank’s functions or clients. But David Roodman, research fellow at the Center for Global Developmentsaid the signing of the amendment puts an end to the bank’s “era of independence.”

The bank’s best hope now is for the search committee to put “forward a strong candidate who breathes fresh life into the Bank while the government’s central bank keeps its hands off,” Roodman said in a blog post.

Yunus, meanwhile, has called on Bangladeshis to “take steps so that they, one day, can make the owners of the Grameen Bank free from this bad dream.”

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About the author

  • Jenny Lei Ravelo

    Jenny Lei Ravelo is a Devex Senior Reporter based in Manila. She covers global health, with a particular focus on the World Health Organization, and other development and humanitarian aid trends in Asia Pacific. Prior to Devex, she wrote for ABS-CBN, one of the largest broadcasting networks in the Philippines, and was a copy editor for various international scientific journals. She received her journalism degree from the University of Santo Tomas.

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