A massive ownership structure change has been proposed for Nobel Prize-winning microfinance institution Grameen Bank.
According to a draft ordinance recently published on the Financial Institutions Division (FID)'s website under the Ministry of Finance, the government’s stake in Grameen Bank is set to decrease from 25% to 5%.
The ordinance also proposes amendments to the Grameen Bank Act of 2013.
The draft has been published on the website of the Financial Institutions Division to seek the feedback from stakeholders.
Requesting anonymity, an official said: “The move is aimed at restoring the government's stake and board representation in the bank to the pre-2011 framework. Before formulating the draft, the FID held discussions with Grameen Bank's legal advisers.”
However, the proposed amendment also seeks to reduce the number of government-appointed directors to one from three.
Additionally, it eliminates the government’s authority to appoint the chairman of the bank. So, once the proposed changes are enacted through the ordinance, the chairman will be elected by the 12-member board, rather than by the government.
Official said that the new arrangement would significantly increase control for the bank's microcredit borrowers and reduce state involvement in the affairs of the institution.
Grameen Bank was founded by Nobel Laureate Professor Muhammad Yunus.
He served as the bank’s managing director until 2011, when the Awami League government forced his resignation, citing his age as the reason.
The move drew widespread criticism both domestically and internationally.
After the fall of Sheikh Hasina's government, the Ministry of Finance appointed a new chairman to Grameen Bank.
Additionally, the interim government reinstated a tax exemption for Grameen Bank and offered it for the next five years, until December 2029.