By Francesca Landini

MILAN (Reuters) - UniCredit (CRDI.MI) has called a shareholder meeting for Dec. 4 to put new governance proposals to the vote, including removing a 5 percent cap on voting rights and allowing the board to select its own candidates to be directors.

The proposed changes come at a time of renewed merger speculation following a report that Italy's largest bank by assets told Berlin recently it was interested in eventually merging with state-backed Commerzbank (CBKG.DE).

"This amendment would align UniCredit's governance with the principle that the voting system be proportional to the capital invested, in line with international best practice," the bank said in a statement on Thursday about the removal of the 5 percent cap.

UniCredit's CEO Jean-Pierre Mustier, appointed just over a year ago to turn the bank around, announced in December that he wanted to shake up the lender's governance.

In a statement, the bank said it would ask an extraordinary general meeting to give its board the power to present its own list of candidates for election as directors and to remove the limit on voting rights.

Shareholders will also be asked to approve the mandatory conversion of the bank's saving shares into ordinary shares at a conversion ratio of 3.82 ordinary shares for each saving share, plus an additional cash adjustment of 27.25 euros.

Scrapping the 5 percent cap will trigger the right for ordinary shareholders to hand back their shares in exchange for money if they choose, the bank said.

UniCredit also said it was exploring the feasibility of delisting its shares from the Warsaw stock exchange following the sale of its stake in Polish lender Bank Pekao (PEO.WA)

In another statement, the bank said it planned to separate its risk management functions from credit related operational functions, creating two different divisions: the Group Risk Management and the Group Lending Office.

(Editing by David Clarke)