The UAE central bank has ordered Bangladesh’s state‑owned Janata Bank to appoint an administrator by mid‑August to start winding down its four UAE branches, citing a capital shortfall.
Regulatory deadline and capital gap
In a letter dated 15 July, the regulator instructed the bank’s UAE chief executive, Mohammad Kamruzzaman, to name a qualified administrator within 30 days. The institution must then follow a detailed wind‑down plan that can stretch up to three years.
Under UAE banking rules, the branches are required to hold a paid‑up capital of 400 million dirhams. The bank currently reports only 100 million dirhams, creating a shortfall of about 300 million dirhams—roughly Tk 1,000 crore at an exchange rate of Tk 33.50 per dirham.
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Earlier notices, including one on 8 July, warned that the deficiency endangered depositors’ funds and could trigger closure. Restrictions such as a ban on opening new accounts and limits on withdrawals from the central‑bank account had already been imposed.
Administrator’s responsibilities
The appointed administrator will oversee the closure of branches in Abu Dhabi, Dubai, Sharjah and Al Ain, manage liabilities, loans, and protect depositors. The plan must be submitted to the Banking Supervision Department for review, and progress reports are required weekly.
Janata Bank must also formally inform correspondent banks and business partners of the wind‑down schedule. The regulator expects the administrator to handle the phased decommissioning of IT infrastructure and ensure orderly settlement of obligations.
Bank’s response and ongoing negotiations
Managing Director Md Mazibur Rahman told TBS that the paid‑up capital requirement was originally 40 million dirhams before being raised to the current level in 2021. He said all four branches remain profitable and that retained earnings have been used to reduce the shortfall gradually.
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Depositors fear losing a trusted service.
For the expatriate community that relies on these branches for remittances, the wind‑down could mean losing a familiar channel for sending money home. While the institution claims the branches are still profitable, the abrupt regulatory pressure may force customers to shift to other lenders, potentially incurring higher fees or delays.
The situation highlights the challenges state‑owned banks face when operating abroad under differing capital standards. This experience may prompt other foreign‑based subsidiaries of Bangladeshi banks to reassess their capital structures to avoid similar actions.