Aug 15 cutoff time to meet its UAE outfit's capital requirement

Cutoff time is now until August 15 for the centrally capital-deficient Janata Bank to fulfill its UAE outfit's jacked-up minimum-capital requirement or pull back, according to the gulf country's regulatory direction.
As such, the state-owned Janata Bank PLC (JBPLC) has run into severe crisis in the United Arab Emirates (UAE) due to its failure to meet the minimum capital requirement, as the Central Bank of the UAE (CBUAE) has issued a final directive for the bank to wind down its operations in the country.
According to the directive, Janata Bank has to appoint an Administrator or Liquidator by August 15, 2026 to initiate the liquidation process.
The CBUAE has warned that failing to comply within the deadline will result in a permanent freeze on Janata Bank's accounts maintained with the CBUAE-a move that could severely impact the bank's international operations.
Currently, there are four overseas branches operating in the UAE, including in Abu Dhabi, Al Ain, Dubai and Sharjah.
The urgency of the situation was highlighted in a letter sent by Managing Director (MD) of Janata Bank PLC Md. Mazibur Rahman to the Secretary of the Financial Institutions Division.
An official document shows that on July 15, the CBUAE issued a letter instructing Janata Bank to appoint an administrator within 30 days (by August 15, 2026) and wind down its business.
Subsequently, the Chief Executive of Janata Bank's UAE operations informed the headquarters through a letter dated July 29, 2026 that the CBUAE reviewed Janata Bank PLC's overall 2025 financials at entity level and decided to uphold its July-15th order.
Under CBUAE Circular No. 12/2021, the bank was required to meet some following financial criteria to keep its UAE operations active.
In accordance with the Circular No-12/2021 of the CBUAE, paid-up capital of Janata Bank has to increase from 100 million to 400 million dirham equivalent to approximately Tk 1.34 billion at the branch level in the UAE, reads the Janata Bank letter.
In addition, at the head office level, some 2.0 billion dirham, equivalent to approximately Tk 67.06 billion, along with adjusting this bank's own negative capital of Tk 164 billion, comes to a total capital arrangement plan for Tk 232.41 billion, the letter mentions.
Describing the situation as "extremely alarming," Janata Bank's Board of Directors has requested urgent intervention from the government and Bangladesh Bank (BB) to either secure permission to keep operations afloat or transition into alternative models, such as a non-banking financial institution or an exchange house.
Although the governor of BB previously emailed the CBUAE Governor requesting an opportunity to maintain operations, the CBUAE has been unmoved.
As the deadline rapidly approaches, the state-owned bank authorities have requested an emergency meeting with all relevant stakeholders, including the Ministry of Finance and the central bank, to determine the next steps.
Agenda items include exploring alternative models-such as converting the UAE operations into a non-banking financial institution or an exchange house-to avoid a complete shutdown and safeguard customer deposits.
Beyond the crisis in its UAE branches, the overall domestic financial health of the bank proper is said to be under severe strain, characterized by record losses, a massive bad-loan volume, and a staggering capital deficit.
As of December 2025, Janata's financial health had deteriorated sharply as its stock of non-performing loans (NPLs) surged to Tk 725.39 billion, exposing the state-owned lender to an unprecedented balance-sheet crunch.
The mounting volume of unrecovered loans pushed the bank's actual capital shortfall to a record Tk 644.06 billion, while its provisioning deficit-the mandatory reserves required against classified loans--widened to Tk 559.32 billion, according to official financial data.
The bank also posted a staggering net loss of Tk 39.31 billion for 2025.
Its core banking operations remained under severe stress, with net interest income staying deeply in the red as interest operations alone incurred a loss of Tk 59.03 billion.
When contacted, the MD of Janata Bank said the Bangladesh Bank governor had officially written to the Central Bank of the UAE regarding the ongoing capital- requirement issues of its UAE branches.
"A joint meeting involving the Foreign Affairs Ministry, the Financial Institutions Division (FID), the Finance Division, and the Bangladesh Bank will be held very soon to discuss the matter," Md. Mazibur Rahman told The Financial Express.
The Janata Bank chief has noted that the capital deficit is not a recent development, but has persisted since 2016.
He highlighted that the minimum capital requirement was previously 40 million dirham, but the UAE authorities now asked for raising it tenfold to 400 million dirham in a single leap.
"Our four branches operating in the UAE are profitable. Historically, we have been managing and absorbing the capital deficit using the operating profits generated by these branches," he added.

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