B Mirror Report: For institutional and public investors of Union Bank PLC, a corporation that is listed on the nation’s stock exchange, a distressing piece of news has surfaced. Bangladesh Bank issued a special order declaring the bank’s fully paid-up capital of BDT 10.36 billion (BDT 1,036 crore 28 lakh 4 thousand 480) to be “nil.” On Sunday, December 28, the Dhaka Stock Exchange (DSE) announced this decision.
Bangladesh Bank’s Bank Resolution Department (BRD) issued the capital reduction order on 21 December 2025 under Section 33 of the Bank Resolution Ordinance, 2025. According to the order, the entire amount of Union Bank’s paid-up capital is henceforth deemed extinguished. The central bank exercised this special authority as part of banking sector reforms and to safeguard the interests of depositors.
As a result of this order, all shares issued by Union Bank are now considered completely cancelled. Consequently, the bank’s existing shareholders have lost all ownership rights against their invested capital. Shareholders will no longer have voting rights, entitlement to dividends, or any legal claim or remedy whatsoever.
The central bank’s decision has been declared retrospectively effective from 5 November 2025. This means that, in legal terms, the bank’s shares had no financial existence from early November. With the order taking immediate effect, the shares held by general investors in the stock market have effectively turned into worthless paper.
No consent from shareholders, creditors, regulatory bodies, or the stock exchange is required to validate this order. Under Section 33(2) of the Resolution Ordinance, Bangladesh Bank exercised this unilateral authority. Through this action, the bank’s existing board of directors and ownership structure have been completely dismantled, paving the way for a fresh restructuring process.
Union Bank authorities stated that, in line with Bangladesh Bank’s instructions, they have already taken necessary measures to reflect the zero-capital adjustment in their financial statements and all internal records. Swift steps are being taken to incorporate this change into the bank’s statutory records.
Globally, such “resolution” mechanisms are used to prevent banks facing severe financial distress or irregularities from becoming insolvent and to ensure continuity of banking services. However, the complete cancellation of shares of a major listed bank has triggered intense panic and a severe confidence crisis among stock market investors.
