The Advisory Council of the interim government has given the go-ahead in principle to the amendment proposal of the Grameen Bank Ordinance that seeks to reduce the government's stake in the Nobel-winning microcredit institution to 10 percent from the present 25 percent.

Drafted by the Financial Institutions Division, the new ordinance also seeks to enhance the control of Grameen Bank shareholders by increasing their stakes to 90 percent from the present 75 percent, according to the proposal placed at a meeting of the Advisory Council yesterday.

As per the amendments, nine board members will be elected from the beneficiaries. Of them, three directors will be nominated, and a chairman will be selected from the three. This removes the government's role in appointing the bank's chairman.

Briefing the media, Syeda Rizwana Hasan, environment adviser, said Grameen Bank was run based on a philosophy that its shareholders would have a voice in its operation.

"But the Nobel laureate Prof Yunus was politically targeted during the tenure of the previous government. And a lot of government control was imposed on the bank."

Established under the Grameen Bank Ordinance 1983, the microcredit institution was brought under the Grameen Bank Act, 2013, by the previous Awami League government.

The interim government has now taken the initiative to roll back many of the changes made in the Grameen Bank Act, 2013, which had effectively authorised the government to enforce regulations governing all aspects of the bank's operations.

As part of that, in early October last year, the interim government reinstated a tax exemption for Grameen Bank until December 2029.

Grameen Bank enjoyed the tax exemption from its inception in 1983, as its activities are primarily focused on poverty alleviation. The benefit was renewed every five years and was last extended until December 2020. The previous government did not extend the exemption after that period.

FOUR OTHER ORDINANCES

At yesterday's meeting, the Advisory Council also approved in principle four other draft ordinances. These are: Public Audit Ordinance, Bank Resolution Ordinance, and Revenue Policy and Revenue Management Ordinance.

Rizwana said the Bank Resolution Ordinance is framed to protect the interests of depositors, bring discipline and accountability to the banking sector, and plug the loopholes.

"You know that a business group siphoned off money from this country by taking control of some banks. We have approved the law so that such things do not take place in the future."

"We are prioritising the interests of savers," she said, adding that the new law brings clarity about how the central bank will intervene to protect the interests of depositors.

As part of the reform of the revenue system, the Advisory Council also approved the draft ordinance on revenue policy and revenue management, which will separate tax policy making from tax administration.

The draft ordinance was framed in line with the recommendation of an advisory committee formed by the finance ministry in October to bring about reforms in the NBR.

Rizwana said to start the trial of groups that were engaged in financial crime, a committee has been formed to probe into the allegations.