State-owned Janata Bank’s four branches in the United Arab Emirates are heading for closure because of a capital shortfall. The UAE regulator rejected the bank’s $81.68 million proposal to cover the shortfall and appointed the audit firm Crowe UAE as administrator to oversee the winding-down of its Emirates operations. The branches, open for 52 years, brought about Tk 10,000 crore (Tk 80 to 100 billion) in remittances into Bangladesh each year, and the prospect of their closure has caused serious concern. The Central Bank of the UAE (CBUAE) recently gave notice of the administrator’s appointment by email, saying it took effect on 8 October. The information is in a letter signed by Janata Bank chairman Fazlur Rahman.
According to sources in the Finance Division, Janata Bank’s head office in Dhaka sent 300 million dirhams, about $81.68 million, to cover the shortfall. But the CBUAE did not agree to accept the money as capital support, citing gaps in regulatory compliance. It also rejected the bank’s request to raise its capital and upheld its decision to wind down the bank’s UAE business.
Following a decision of the bank’s board on 6 October, the money sent to cover the shortfall was transferred, on the UAE central bank’s instruction, to Janata Bank’s nostro account at Standard Chartered Bank in New York. The treasury department at the head office was told not to use the money for anything else until further instructions. Letters reporting the wind-down and Crowe UAE’s appointment as administrator were also sent to the secretaries of the Financial Institutions Division and the Finance Division of the finance ministry and to the governor of Bangladesh Bank.
Earlier, the CBUAE had restricted withdrawals (debit transactions) from the accounts of these Janata Bank branches held with it. It also told the bank to stop opening new customer accounts and to prepare to wind down its existing business step by step.
Janata Bank later asked the Finance Division for a firm commitment of capital equal to 2 billion dirhams to keep its UAE operations running. Despite that support and the bank’s efforts to cover the shortfall, the UAE central bank did not back away from the wind-down. The appointment of an administrator takes the closure one step further, and Janata Bank must bear the cost of the process.
Janata Bank chairman Fazlur Rahman told the daily Amar Desh that the authorities had been informed. “Even after we took steps to cover the capital shortfall, they rejected our proposal,” he said.
Janata Bank has operated in the UAE since 1974. It now has four branches and a chief executive office in the country. By number of branches, it is the second-largest foreign bank operating in the UAE, according to an assessment cited in the report.
About 70,000 depositors, 3,800 borrowers and around one million remittance senders are linked to the bank’s UAE operations. That makes the wind-down significant for expatriates’ banking services and for the country’s remittance inflows.
Janata Bank currently sends an estimated Tk 8,000 crore to Tk 10,000 crore a year in remittances home from the UAE. No detailed plan has yet been made public for how these customers’ accounts, deposits and remittance services will be handled after the closure.
In 2021 the UAE central bank raised the minimum capital requirement for foreign banks from 40 million dirhams to 400 million dirhams. Janata Bank’s UAE unit had paid-up capital of 100 million dirhams. Even with 83 million dirhams of undistributed profit, it remained well short of the new threshold.
Because of the shortfall, debit transactions from Janata Bank’s reserve account at the UAE central bank were restricted from 8 July 2026. A week later, on 15 July, the UAE regulator told the bank to formally begin winding down and to finish within three years. It also ordered the appointment of an administrator.
The regulator warned that if the bank did not appoint an administrator and start the wind-down on time, its reserve account would be permanently suspended after 14 September and the regulator would appoint an administrator itself.
To resolve the situation, Bangladesh’s ambassador to the UAE met an assistant governor of the country’s central bank on 18 August. He proposed a commitment of 2 billion dirhams in capital support for Janata Bank and a minimum of 100 million dirhams in capital for each branch.
On 1 September, the chief executive of Janata Bank’s UAE operations told the authorities concerned that the central bank would begin the wind-down from 8 September and would review progress on appointing an administrator and meeting other regulatory conditions.
With a capital shortfall, failures of regulatory compliance and no response to its efforts to raise capital, Janata Bank’s long-running UAE operation now faces closure. How far this affects the bank’s customers, expatriate Bangladeshis and remittance flows will depend on how the wind-down is carried out.
বাংলায় মূল প্রতিবেদন পড়ুন · Read the original Bengali report