Dhaka, Jan 18 (Agencies): Nobel Laureate Muhamad Yunus appeared in a court in northern Bangladesh on Tuesday in connection with a defamation suit dating back to 2007, and was granted bail.

Judicial magistrate Rozina Khan of the Mymensingh court granted bail to Prof Yunus on the defamation suit filed by a local politician as he appeared in person, court officials said.

The bail was granted against a bond of Taka 5,000 after microfinance pioneer Yunus appeared on the dock complying with an earlier court order.

An official said that the court also relieved Yunus from appearing in person for the next hearing which was set for February 20.

"(On February 20 hearing ) his lawyers would represent him," the court official said.

The development came a week after the government ordered a "review" of transactions of Yunus' microfinance lender Grameen Bank.

Mymensingh unit joint secretary of left leaning Jatya Samajtantrik Dal (JSD) Nazrul Islam Chunnu filed the defamation case three years ago objecting to Yunus' statement to a foreign news agency in which he had said that Bangladesh's politics was simply about the "power to make money, having little links with ideals".

Yunus's interview with French news agency AFP at its Paris headquarters in January 2007 was carried by Bangladeshi newspapers prompting Chunnu to file the defamation suit.

A local journalist who witnessed the court proceedings said during his brief appearance that the sexagenarian economist did not speak as his lawyers prepared the papers and arguments for his bail.

He said prosecution lawyers opposed Yunus's lawyers' plea for relief from personal appearance but the magistrate overruled the objection.

Police said several hundred people gathered at the court complex as Yunus appeared there and entered the court room being flanked by lawyers, some of them accompanying him to Myensingh from Dhaka.

Yunus won the Nobel Peace Prize along with his Grameen Bank in 2006 as his experiment of poor men's banking earned Bangladesh the repute of being the home of microcredit.

The development came a week after the government ordered a "review" of his Grameen Bank's transactions and constituted a five-member expert committee comprising a university professor, a central bank official, a former deputy auditor and comptroller general, a Supreme Court lawyer and two bankers.

The move was widely seen as a sign of friction between him and Prime Minister Sheikh Hasina's government.