The regulatory body will bring such lending institutions under a framework and coordinate their formations and operations to ensure transparency of their activities.

Saifur Rahman, who piloted the Micro-Credit Regulatory Authority Bill 2006, said the NGOs should have accountability in spending their money and conducting their activities in the country.

"Some NGOs' foreign connections are so strong that, being finance minister, I sometimes feel embarrassed," he told the House.

He said the kingpins of these NGOs try to interfere in government activities and even influence the electoral process.

In his harsh criticism, Saifur said some owners of NGOs preach for poverty alleviation sitting in a cosy atmosphere of Sonargaon Hotel, but they don't know how their people repress the poor for getting back the money with high interest, varying from 22 percent to over 25 percent.

The minister said the bill is aimed at controlling different interest rates of micro-credit institutions through regulatory authority and assuaging the sufferings of the poor borrowers.

Under the provisions of the bill, a governing board of the regulatory authority will be constituted with the governor of Bangladesh Bank as its chairman. The government will nominate six members for the Board. The executive vice-chairman of the board will be acting as member-secretary.

The nominated members will hold their posts for three years.

Armed with the tough new law, the regulatory authority will issue certificates to micro-credit institutions for their operations, make on-the-spot supervision in case of established micro-credit institutions or opening a new institution or its new branch offices.

The authority will make arrangement for the audit of a micro-credit institution at the request of its financier. Besides, the authority will formulate policy for micro-credit institutions.

"If any person operates any micro-credit institution without the authority's certification, provides wrong information about his institution, abuses power, he will be punished with one-year imprisonment or fined one lakh taka or both," the bill states.