Bangladesh’s banking sector is entering a new era of regulatory oversight as the central bank moves away from traditional supervisory methods towards a risk-based supervision (RBS) framework. Under this approach, banks and financial institutions will no longer be monitored uniformly; instead, the intensity of oversight will be determined by each institution’s risk profile.
The new system was originally scheduled to take effect on 1 January 2026. However, in deference to the national mourning following the passing of former Prime Minister Khaleda Zia, its implementation has been deferred by one week and will now commence next Sunday.
As part of this reform, Bangladesh Bank has restructured its supervisory divisions, expanding them from 13 to 17. Among these, 12 divisions will focus on general bank supervision, while the remaining five will specialise in technical oversight, digital banking, data management and analysis, policy formulation, payment system supervision, and the prevention of money laundering and terrorism financing. The newly created Money Laundering & Terrorism Financing Prevention Division will operate on the model of the Bangladesh Financial Intelligence Unit (BFIU), closely monitoring banks’ compliance in these areas.
Bangladesh Bank officials explain that the new system will allow for dynamic risk assessment. Whereas conventional supervision primarily focused on compliance with laws and regulations, the RBS framework will evaluate each bank’s business model, governance standards, and capacity to manage future risks. This proactive approach aims to identify weaker institutions early, enabling timely corrective measures and mitigating the likelihood of systemic crises.
The following table summarises the structure of the new supervisory divisions:
| Division | Area of Supervision | Number of Units |
|---|---|---|
| Bank Supervision | General bank oversight | 12 |
| Technical & Digital Banking | Technology and digital services | 1 |
| Data Management & Analysis | Information analysis | 1 |
| Policy Formulation | Regulatory guidelines and policy | 1 |
| Payment System Supervision | Transactions and payment systems | 1 |
| Money Laundering & Terrorism Financing Prevention | Financial crime prevention | 1 |
The primary objectives of the new framework are to prevent financial crises, maintain sectoral stability, and protect depositors. Looking ahead, Bangladesh Bank plans to implement the International Financial Reporting Standard (IFRS 9) by January 2028, aligning banks’ annual reports with global accounting standards.
Officials emphasise that the risk-based approach is expected to strengthen governance and accountability across the banking sector, fostering transparency and responsible operations. By focusing resources where risks are greatest, the central bank hopes to create a more resilient financial system capable of withstanding economic shocks while safeguarding public trust.