Govt to inject Dh300m to keep Janata Bank’s UAE operations afloat

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Govt to inject Dh300m to keep Janata Bank’s UAE operations afloat

The Bangladesh government has approved a Dh300 million capital injection to keep Janata Bank PLC’s operations in the United Arab Emirates (UAE) running.

The Finance Division has instructed the state-owned bank to remit the equivalent of $81.68 million to the UAE by Wednesday to meet the capital requirements set by the UAE central bank.

Separate letters from the Financial Institutions Division and the Finance Division confirmed the approval. The funds will be transferred from a reserved sub-sector of Janata Bank’s head-office assets.

The UAE central bank had earlier ordered Janata Bank to wind down its operations after the bank failed to maintain the required paid-up capital. The new capital injection will allow its four branches in Abu Dhabi, Dubai, Sharjah and Al Ain to continue providing services.

Janata Bank has been operating in the UAE since 1976, and its branches serve as important financial channels for Bangladeshi expatriates.

Under UAE central bank rules, Janata Bank was required to maintain capital of Dh400 million but currently has only Dh100 million, leaving a Dh300 million shortfall.

The UAE regulator had issued several warnings since the beginning of this year over the capital shortfall and other regulatory violations. It eventually ordered the bank to close its branches, suspend services and appoint an administrator, while also restricting withdrawals from the bank’s accounts.

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