Bangladesh Bank has introduced a major overhaul of its supervisory regime, replacing the traditional inspection model with a risk-based supervision (RBS) framework to oversee banks and financial institutions.
Under the new approach, supervision will no longer be uniform across all banks. Instead, oversight intensity will be calibrated to the risk profile of each institution.
To implement the framework, the central bank has restructured 13 supervision-related departments into 17. Of these, 12 departments will operate under the banner of “Bank Supervision”, with different categories of banks placed under separate units.
These departments will provide supervision and guidance based on information and data submitted by banks and will collect additional data where necessary to verify accuracy.
The programme formally begins Sunday. Although the new system was scheduled to start on January 1, its launch was postponed following the declaration of state mourning after the death of former prime minister Begum Khaleda Zia.
Areif Hossain Khan, executive director and spokesperson of Bangladesh Bank, said some elements of the new framework have already been put in place. The departments have been reorganised, and full-scale operations formally began on Sunday.
Central bank officials said the outcomes of risk-based supervision could lead to strict measures, including disciplinary action against bank officials, removal of managing directors, or dissolution of boards. Where necessary, the Bank Resolution Ordinance may also be invoked.
Beyond bank supervision, five additional departments have been created to cover technical and digital banking supervision, data management and analysis, supervisory policy formulation, payment systems supervision, and anti-money-laundering and counter-terrorist financing oversight.
The new anti-money-laundering supervision department will monitor banks’ related activities in line with the model of the Bangladesh Financial Intelligence Unit.
