The advisory council of Bangladesh’s interim government has given in-principle approval to a proposal amending the Grameen Bank ordinance, a move aimed at significantly reducing the state’s influence over the Nobel-winning microcredit institution.

Under the proposed amendment, the government’s stake in Grameen Bank would be cut from 25 percent to 10 percent, while the shareholding of the bank’s borrower-members would rise from 75 percent to 90 percent.

The draft ordinance, prepared by the Financial Institutions Division (FID), also aims to enhance beneficiary control over the bank’s governance.

According to the proposed changes, nine members of the bank’s board would be elected directly by its beneficiaries. A panel of three directors would then be selected to elect the chairman, thereby eliminating the government’s role in appointing the head of the board.

Speaking at a briefing, Syeda Rizwana Hasan, adviser to the Ministry of Environment, Forests and Climate Change, said the changes seek to restore the bank’s founding values. “Grameen Bank was run based on a value system that ensured its beneficiaries had a voice,” she said, referring to the government’s increasing control of the institution during the previous administration.

The new ordinance also proposes expanding Grameen Bank’s outreach to include both landless and destitute populations at the union and municipal levels.

Founded in 1983, Grameen Bank came under heightened government scrutiny during the Awami League’s 15-year rule. In 2011, founder and current Chief Adviser to the interim government, Professor Muhammad Yunus, was forced to step down, with the state citing retirement age regulations for public servants.

Initially, Grameen Bank operated with a 60:40 member-to-government shareholding ratio. By the end of 2010, members contributed 96.71 percent of the bank’s paid-up capital, while the government’s share was just 3.29 percent. The state later injected funds to restore its 25 percent stake.