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Bangladesh Bank has found widespread irregularities at state-owned Janata Bank, including failures to identify long-dormant deposits, delays in creating demand loans, questionable transactions and weak oversight by the bank’s board and management.
A central bank inspection found that Janata Bank’s core banking system (CBS) does not have a mechanism to automatically identify deposits that have remained unclaimed for 10 years or more. As a result, the bank could not determine the actual amount of such deposits from 2009 to 2025, raising risks of fraud, embezzlement and money laundering, according to the inspection report.
The irregularities were found both in the bank’s domestic operations and its branches and operations in the United Arab Emirates.
According to information provided by the bank’s treasury department, 488 accounts at 58 branches contained Tk94 crore in unclaimed deposits that had remained inactive for at least 10 years as of October 1, 2025. However, the list did not include information from several branches, including the local office, leaving the actual amount of unclaimed deposits unknown.
The inspection also found Tk54 lakh lying dormant for at least 10 years in three sundry accounts of the Janata Bhaban Corporate Branch.
The bank also lost an opportunity to collect about Tk8,270 crore in interest because it failed to create demand loans in time against liabilities of Beximco Group companies and Orion Oil & Shipping Ltd.
According to the report, the bank failed to create demand loans after debiting Nostro accounts for Beximco Group companies, resulting in an estimated loss of around Tk8,200 crore in interest collection opportunities.
A similar failure involving Orion Oil & Shipping deprived the bank of the opportunity to collect another Tk470 crore in interest, the report said.
Orion Oil & Shipping’s outstanding liability currently stands at around Tk8,307 crore, while a Nostro debit liability of Tk8,316 crore created against the customer has yet to be adjusted, according to the report.
Bangladesh Bank also found irregularities in the handling of Export Development Fund (EDF) transactions.
Even after the central bank debited Janata Bank’s FC Clearing account following the expiry of EDF facilities, or the bank debited branch Nostro accounts for settlement of letters of credit, liabilities were not created in customers’ names in time.
Unreconciled EDF entries also remained outstanding for a long period. Of $495.27 million in unsupported entries communicated by the local office on June 30, $443.64 million had been reconciled, the report said.
The central bank noted that the board had taken decisions several times regarding the issue, but these were not implemented at branch level, describing the situation as an example of inefficiency and ineffective management and board oversight.
UAE operations
Major irregularities were also found in Janata Bank’s UAE operations, including classified loans worth 41.48 million dirhams.
The report said long-term loans totalling 142.88 million dirhams, equivalent to about Tk304 crore, involving the Sheikh Khalifa Fund, Metropolitan Enterprise and Sheikh Khalifa bin Zayed Al-Nahyan had been written off. The inspection report described the loan write-offs as a matter of concern.
Janata Bank’s chief executive’s office in the UAE has 12 employees, including three Indian nationals. The inspection team found no documents showing whether approval had been obtained for their appointments.
The inspection also found that six laptops purchased for 21,892 dirhams from Liberty Computers LLC on May 27, 2020, could not be located during the inspection.
Several discrepancies were also found in the UAE operations.
At the Al Ain branch, the statement of affairs showed a balance 6,772 dirhams lower than the current-account ledger balance. At the Sharjah branch, a 17 million-dirham discrepancy between sundry deposits and sundry asset accounts remained unexplained.
At the Dubai branch, a 910,000-dirham difference was found between the statement and ledger balance of sundry deposits under the letter-of-guarantee margin account.
The inspection also found a shortfall of 187 million dirhams in Transguard Bank compared with the balance shown by Janata Bank, while the sundry clearing account had a deficit of 8.948 million dirhams.
Weak oversight
The Bangladesh Bank report attributed the irregularities to shortcomings in supervision, inefficiency and ineffective decision-making by Janata Bank’s board and management.
It also noted that similar irregularities had continued for a long time without effective corrective measures.
Documents related to the matter indicate that steps have been initiated to dissolve Janata Bank’s board and management committee in response to the irregularities.
The report also raised concerns over Janata Bank Exchange Company’s operations in Italy. Its head office and Rome branch had previously operated from the same premises, but two separate offices were taken in 2017 without a clear explanation, according to the report.
Remittances sent by Janata Exchange Company SRL from Italy were paid in advance from the “Sundry Account—Advance Payment to Transfer” account of the bank’s Dilkusha Corporate Branch.
The bank said it had been unable to make payments against remittances sent since 2015 from the cover fund because of losses suffered by the exchange company.
Bank’s response
Janata Bank Managing Director Md Mujibur Rahman acknowledged the shortcomings and said the bank had responded to Bangladesh Bank’s observations.
“We have discussed the issues with officials of the relevant departments and will provide a further response,” he said.
Regarding unclaimed deposits, he said around Tk80 crore linked to Hallmark remained tied up in a court case and could not be returned until a court order was issued.
He attributed some of the irregularities involving Nostro accounts to system deficiencies, saying the problems would be addressed.
“Running a bank in this way involves risks,” he acknowledged.
Regarding the UAE operations, Rahman said the bank had increased its capital and that the Ministry of Finance had agreed to provide the equivalent of 2 billion dirhams required for the UAE operation.
He said the bank was working to recover defaulted loans and was also using an exit policy to improve recovery.
Bangladesh Bank spokesperson and Executive Director Arif Hossain Khan said the central bank would take action against irregularities regardless of when they occurred.
“Bangladesh Bank is always against irregularities. Whether they occurred before or after the 2024 mass uprising, action will be taken in accordance with the law,” he said, adding that no one involved in wrongdoing would be spared.
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