Bangladesh Bank Triples UCB's Ownership Ceiling to 30 Percent, Unlocking Shares Blocked by a Former Minister

Bangladesh Bank has cleared the way for a single investor or family to own nearly a third of United Commercial Bank PLC, a dramatic loosening of a rule that normally caps any one shareholder at 10 percent of a bank's paid-up capital. A circular issued on Tuesday exempted UCB from Section 14(Ka) of the Bank Company Act, 1991, under the central bank's Section 121 authority to grant such carve outs in consultation with the government. The new ceiling: 30 percent, for any person, institution, company, or family grouping, whether the shares are held directly or indirectly, alone or jointly with others.

• Bangladesh Bank raised UCB's single investor or family ownership cap from 10 percent to 30 percent of paid-up capital.
• The exemption uses Section 121 of the Bank Company Act and applies only to UCB, not the sector as a whole.
• A sizeable block of UCB shares tied to former land minister Saifuzzaman Chowdhury remains frozen under a High Court order.
• The relaxation follows a Tk775 crore rights share issue and an Tk800 crore subordinated bond already approved to rebuild UCB's capital base.

What Bangladesh Bank actually changed

The circular's own language is spare. It says the exemption was granted "to strengthen the capital base" of the bank, without naming a prospective buyer or specifying how much fresh capital UCB expects to raise under the new ceiling. That restraint is typical of these central bank notices, but it leaves open the size and identity of whoever eventually takes up the larger stake. What is clear is the mechanism: Section 14(Ka) of the Bank Company Act ordinarily stops any single shareholder, whether an individual, a company, or a family acting together, from holding more than 10 percent of a bank's shares, a guardrail meant to prevent the kind of concentrated family control that contributed to governance failures across the sector in the past decade. Section 121 gives Bangladesh Bank the power to waive that limit for a specific lender, and it has now done so for UCB alone.

Why this bank, and why now

UCB's ownership structure has been unsettled since the political upheaval of August 2024. Bangladesh Bank dissolved the bank's 18 member board, which had been dominated by relatives of Saifuzzaman Chowdhury, a former UCB director and former land minister whose wife, Rukhmila Zaman, had chaired the board. A central bank official, who spoke on condition of anonymity, said a High Court order has since frozen a large block of shares connected to Saifuzzaman, keeping those shares out of circulation and effectively starving the bank of one obvious source of fresh capital. The official said the new 30 percent ceiling was designed to create room for large investors, domestic or foreign, to step in and fill that gap, rather than leaving the bank to wait indefinitely for a legal resolution.

"This is a significant step towards removing a legal barrier to large share investments," UCB said in a statement responding to the circular, adding that a shortage of capital is "a well known problem" across Bangladesh's banking sector.

A capital push that was already under way

The ownership exemption is the latest in a string of moves UCB has made this year to rebuild its balance sheet. The Securities and Exchange Commission approved a Tk775.18 crore rights share offering in early July, giving existing shareholders one new share for every two they already hold, at a face value of Tk10. That alone was designed to lift UCB's paid-up capital from Tk1,550.37 crore to roughly Tk2,326 crore, clearing a Tk2,000 crore threshold Bangladesh Bank has set for banks that want to declare dividends. UCB has separately lined up an Tk800 crore subordinated bond issue, a form of debt that counts toward regulatory capital without diluting existing shareholders as much as new equity would.

Capital-raising step	Size	Status
Rights share issue	Tk775 crore	BSEC approved, July 2026
Subordinated bond issue	Tk800 crore	Approved
Single investor ownership ceiling	10% to 30%	Bangladesh Bank circular, Oct 27, 2026

UCB's own numbers show why the bank is in a hurry. In the January to March quarter, consolidated earnings per share came in at just Tk0.07, an improvement on a restated Tk0.04 a year earlier but still thin. Net operating cash flow per share actually turned negative, at Tk4.22, reversing a positive Tk6.98 the year before, which the bank attributed to loan disbursements and investments outpacing deposit growth alongside softer net interest income. Net asset value per share stood at Tk25.97. None of those figures scream crisis, but they do explain why UCB's board and Bangladesh Bank both seem keen to get a well capitalised strategic investor through the door rather than wait for organic profit growth to do the job.

What it means for depositors, shareholders, and would-be investors

For UCB depositors, a bank with a stronger capital cushion is, all else equal, a safer place to keep a fixed deposit, and readers comparing FDR rates across banks may want to watch whether UCB's funding costs shift as new capital comes in. For existing minority shareholders, a 30 percent ceiling means the arrival of one dominant new investor is now plausible, which could change how the bank is run, for better or worse, depending on who buys in. UCB itself says it wants more than a cheque: the bank describes its ideal partner as a "reputable, financially capable strategic investor," local or foreign, bringing technology, international experience, and durable governance commitments, a wish list that shareholders endorsed at the bank's last annual general meeting. Whether such a buyer actually emerges, and whether the frozen shares tied to Saifuzzaman Chowdhury are ever resolved through the courts, will determine if this circular turns into real new capital or stays a door that nobody walks through.