Bangladesh Bank Launches Risk-Based Supervision to Revitalize Banking Sector

Bangladesh Bank has officially launched a Risk-Based Supervision (RBS) framework, moving away from a traditional "one-size-fits-all" oversight model. The shift aims to restore depositor confidence and address long-standing mismanagement within the financial sector.

Under the new system, the central bank will monitor institutions based on their specific risk profiles—including governance, asset quality, and liquidity—rather than simple compliance checklists. Officials say this proactive approach will allow regulators to identify and fix financial vulnerabilities much earlier.

To support the change, the central bank has completed a major internal overhaul, reorganizing 13 existing departments into 17 specialized units. This includes 12 departments for bank-specific oversight and five units dedicated to digital banking, data analytics, and payment systems. A new department has also been established to combat money laundering and terrorist financing.

The rollout, originally set for January 1, was briefly delayed following the death of former Prime Minister Begum Khaleda Zia. Full implementation began on Sunday, January 4.

Spokesperson Arif Hossain Khan stated that the new regime will be "far more rigorous," warning that weak institutions may face tough enforcement, including the removal of directors or the dissolution of entire boards.