Grameen Bank, the Nobel-winning microfinance institution, is set for a major shake-up in its ownership structure and board as the government plans to reduce its stake to 5 percent from the current 25 percent.

The plan has been outlined in the draft of a new ordinance published on the Financial Institutions Division website. The ordinance seeks to amend the Grameen Bank Act of 2013. 

The proposed amendment also seeks to reduce the number of government-appointed directors to one from three and remove the government's role in appointing the bank's chairman.

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Once the proposed changes are enacted through the ordinance, the chairman will be elected by the 12-member board, rather than by the government. This will reinforce the autonomy of the institution. 

The issue came under significant scrutiny during the 15-year rule of the Sheikh Hasina government, which was ousted in a mass uprising in August last year.

The new arrangement will significantly increase control for the bank's microcredit borrowers and reduce state involvement in the affairs of the institution, which was founded by Professor Muhammad Yunus, now the leader of Bangladesh's interim government. 

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Yunus was forced to resign from Grameen Bank as managing director in 2011 after the government stated that his age exceeded the retirement age for public servants.