The brownbanded bamboo shark is fished and retained throughout Southeast Asia. In particular, it is one of the most common species found in fish markets across Thailand, where overall catch landings of sharks have declined by >90% from 10,000 tons to 1,000 tons in less than a decade (2004–2011). It is susceptible to capture in a range of fishing gear, and given its coastal preference, the distribution for this species largely overlaps with artisanal and commercial fisheries in many countries. Within Australia, the species is afforded protection through marine park zones throughout several parts of its distribution; it is not targeted for any fishery and as bycatch it is largely released with likely high survival rates given its general hardiness. There may be some level of take for the aquarium trade.
There is some taxonomic uncertainty for this species with evidence suggesting that the Australian form may be a cryptic sister-species to the Southeast Asian form. This taxonomic uncertainty has implications for the conservation of this species as this may limit the replenishment of exploited populations if they do not receive recruitment from largely unexploited populations. Based on the ongoing threats to this species from fishing pressure, habitat destruction and suspected population declines based on declines in aggregate Thai shark landings, the Grey Carpetshark is assessed globally as NEAR THREATENED. In Southeast Asia where the fishing pressure is greatest and increasing, it may meet VULNERABLE in the near future as it is likely to be close to meeting the thresholds for criterion A2bd. A key priority is to clarify population reduction and population substructure.

In Australia, where mortality from fisheries is limited, and the species is common in some marine protected areas, the species is assessed as Least Concern.