Bangladesh Bank is preparing to introduce a comprehensive policy on the use of artificial intelligence (AI) in the country’s banking sector by December, marking the first initiative of its kind by a government institution.
A seven-member special working group has been formed to draft and implement the policy, which is expected to submit its full set of guidelines next month.
The team leader, Executive Director of ICT Division-1, Zakir Hasan, said, “While AI brings significant benefits, its uncontrolled use can lead to security risks and unethical practices. This policy aims to ensure that the use of AI in the banking sector and within Bangladesh Bank remains safe, ethical, and properly regulated.”
Under the new framework, the central bank plans to develop and operate its own large language model (LLM) AI system to reduce cross-border data transfer risks. “When data is transferred to foreign servers or networks, security concerns arise. Our in-house AI system will effectively mitigate these risks,” Zakir explained.
The proposed policy aims to strengthen economic forecasting capabilities, including predictions of inflation, GDP growth, and foreign currency reserves. AI will also be used as a tool to prevent fraud and money laundering by analysing transaction patterns to detect irregular activity more swiftly and accurately.
In addition, AI will assist in monitoring credit, market, and liquidity risks, enabling more data-driven and effective risk management. The integration of AI into fintech and digital banking initiatives is expected to enhance customer-focused, secure, and efficient banking services.
Zakir added that AI could also be used to simplify the presentation of policies and reports for the public and to analyse and resolve customer complaints more quickly.
According to data from the Bangladesh Institute of Bank Management (BIBM), 60% of banks currently lack an AI cybersecurity policy, while 40% have one in place. Furthermore, 68% of banks have yet to incorporate AI into their operational policies.
Research findings indicate that 69% of banks are partially prepared to implement AI, 11% are nearly ready, and another 11% are fully prepared. Conversely, 9% of banks remain unprepared, and only 5% currently use AI in disaster recovery planning—leaving 95% without AI deployment in this critical area.