Bangladesh Bank (BB) has eased restrictions on shareholding limits in United Commercial Bank PLC (UCB), permitting a single investor or family to hold up to 30 percent of the bank’s paid-up capital. The central bank announced the change in a circular issued on Monday, exempting UCB from the shareholding limit stipulated under Section 14Ka of the Bank Company Act, 1991.

The exemption applies to any individual, institution, company, or family members holding shares in UCB, whether directly or indirectly, and whether individually or jointly with others. The directive was issued under Section 121 of the Bank Company Act, which authorizes Bangladesh Bank to grant such waivers.

According to the circular, the decision aims to strengthen UCB’s capital base. However, the central bank did not provide specifics regarding the identity of potential investors or the amount of fresh capital the bank anticipates raising through this move. The rationale behind granting the exemption was also not elaborated upon.

A Bangladesh Bank official, speaking on condition of anonymity, noted that a significant portion of UCB’s shares had been blocked, implying potential limitations on share availability prior to the relaxation.

The adjustment could open the door to increased investment concentration in UCB, potentially facilitating capital augmentation but raising questions about ownership concentration and corporate governance. Bangladesh Bank has yet to disclose further details on the expected impact or implementation timeline for this new regulation.