Bangladesh Bank Regulations for Banks and Finance Companies: Current Compliance Guide

This roadmap is conceptual. It is not a licence application checklist, statutory timeline or guarantee of approval.

Executive Summary and Regulatory Architecture

Entity or issue	Primary regulatory route	Safe compliance position
Bangladesh Bank mandate	Bangladesh Bank Order, 1972, including Article 7A	BB regulates and supervises banking companies and financial institutions and promotes a secure, efficient payment system.
Banking company	Bank Company Act, 1991 as amended, plus BB prudential rules and circulars	Use the current Act and the BRPD/DOS rule applicable to the activity; do not rely on a historical circular number alone.
Finance company	Finance Companies Act, 2023 and DFIM/BB instruments	The 2023 Act replaced the 1993 finance-company statute; confirm current licence, product and governance conditions.
Supervision and returns	Department-specific BB directions, inspections and reporting templates	Maintain a version-controlled obligations register and evidence for every return, approval and remediation.

Short answer: Bangladesh Bank compliance is a layered system of Acts, regulations, prudential guidelines, circulars, approvals, returns and supervisory directions. The correct rule depends first on whether the entity is a bank, a finance company or another regulated participant, and then on its product and risk profile.

1. Legal Foundations

The Bangladesh Bank Order, 1972 establishes the central bank and Article 7A states functions including formulating monetary policy, promoting and regulating a secure and efficient payment system, and regulating and supervising banking companies and financial institutions. The Bank Company Act, 1991 is the principal bank-company statute. Finance companies are licensed and supervised under the Finance Companies Act, 2023, which Bangladesh Bank’s financial-institutions page identifies as the governing Act for finance companies.

Other rules may apply depending on the activity: foreign-exchange instruments, AML/CFT legislation and BFIU guidance, the Companies Act, accounting and financial-reporting requirements, sector-specific payment rules, consumer protection instruments and current BB circulars. A circular should be read with its date, addenda, repeal/amendment status and entity scope.

2. Licensing and Perimeter Mapping

Before incorporation, expansion or a product launch, prepare an entity-and-activity map. Identify whether the proposal involves deposit-taking, lending, leasing, investment, payment processing, remittance, foreign exchange, agent activity, digital banking, or another regulated function. A company registration or technology contract does not itself authorise a regulated financial activity.

• Use the current Bangladesh Bank procedure and written direction for a proposed bank or finance-company licence.
• Separate sponsor, shareholder, director, management, related-party and beneficial-owner information.
• Document the proposed products, funding model, customer protection, outsourcing, technology and business-continuity arrangements.
• Do not publish a universal paid-up-capital amount, LOI period, NOC deadline or processing time unless the current applicable instrument supports it.

3. Capital Adequacy, Liquidity and Exposure

Bangladesh Bank’s Risk-Based Capital Adequacy framework implements Basel III for scheduled banks. The official prudential summary states that banks submit solo and consolidated CRAR reports to the Department of Off-Site Supervision and submit an ICAAP report to BRPD under the applicable schedule. Capital adequacy is therefore an ongoing measurement, reporting and supervisory process—not a one-time incorporation threshold.

Liquidity and reserve obligations are also instrument- and entity-specific. At the time of this review, Bangladesh Bank’s public homepage displayed reserve ratios of 13% SLR and 4% CRR for traditional banking, 5.5% SLR and 4% CRR for Islamic banking, and separate ratios for deposit-taking and non-deposit-taking finance companies. Those displayed values are date-stamped public information, not a substitute for the current circular or the institution’s classification.

Exposure limits, classification, provisioning, large-loan reporting, related-party transactions and risk-based capital must be checked against the current BRPD/DOS/DFIM instrument. The former fixed CRAR, CRR, SLR, provisioning, single-borrower and penalty assertions were removed where the source packet did not establish their current scope or value.

4. Governance and Internal Control

Board composition, director eligibility, chief executive appointment, committees, fit-and-proper review, related-party controls and internal audit are governed by the current Bank Company Act, Finance Companies Act, BB guidelines and circulars applicable to the institution. Avoid treating an old board-size, term, independent-director percentage or appointment timeline as universal. Keep board minutes, declarations, conflict registers, committee charters, internal-audit findings, risk assessments and remediation evidence.

Bangladesh Bank’s current guidance list separately identifies bank-director materials, internal-control guidance, core-business-solution controls, ICT security and cybersecurity resources. A finance company’s control framework should be mapped to the version that applies to it, including outsourced or cloud services.

5. AML/CFT and Customer Due Diligence

Banks and finance companies must follow the Money Laundering Prevention Act, Anti-Terrorism Act, BFIU instructions and applicable Bangladesh Bank guidance. The compliance file should cover customer identification and beneficial ownership, risk classification, enhanced due diligence, sanctions and targeted-financial-sanctions screening, transaction monitoring, suspicious-transaction escalation, record retention, independent testing and CAMLCO accountability.

BFIU publishes separate guidance for banks, financial institutions, beneficial owners, PEPs, e-KYC and suspicious-transaction reporting. The previous article’s fixed CTR threshold, universal filing deadline and fixed penalty statement were removed because they require the exact current instrument and reporting context.

6. Foreign Exchange and Cross-Border Activity

Foreign-exchange transactions, foreign borrowing, remittance, offshore banking and repatriation are governed by the Foreign Exchange Regulation Act, Bangladesh Bank directions and the current GFET volumes or sector-specific circulars. The required approval depends on the transaction, entity, counterparty, currency, purpose, documentation and applicable exemption. An article cannot safely promise one approval route, time or tax-clearance package for every transaction.

7. Reporting, Inspection and Remediation

Bangladesh Bank uses on-site and off-site supervision, regulatory returns, risk assessments, meetings, directions and other supervisory tools. The applicable department and reporting cycle depend on the entity and activity. Maintain a regulatory calendar containing the return name, source instrument, frequency, owner, reviewer, submission evidence and correction trail.

When an inspection or direction identifies a gap, preserve the notice, response, board approval, root-cause analysis, corrective-action plan, closure evidence and any continuing undertaking. The former article’s claims of universal annual inspections, fixed CAMELS cycles, automatic board supersession and fixed NOC windows were removed or qualified because those outcomes are not universal from the reviewed public sources.

8. Practical Compliance Checklist

Control area	Evidence to maintain	Review question
Legal perimeter	Entity/product map, licence, approvals and current source register	Does each activity have the correct authority and current approval?
Capital and liquidity	CRAR/ICAAP, reserve/liquidity calculations, board review and returns	Are calculations made under the current method and entity scope?
Governance	Board file, fit-and-proper documents, committees, conflicts and minutes	Can each appointment and decision be evidenced?
AML/CFT	KYC, beneficial ownership, risk assessment, monitoring, STR process and testing	Is the procedure tied to current BFIU/BB guidance?
Technology and outsourcing	Architecture, access logs, resilience, vendor due diligence, incidents and audits	Are the applicable ICT/cyber/cloud controls documented?
Supervision	Returns, inspection responses, directions, remediation and closure evidence	Is there a single owner and reviewer for every obligation?

Official Sources Reviewed

• Bangladesh Bank Order, 1972
• Bank Company Act, 1991
• Finance Companies Act, 2023
• Bangladesh Bank: Banks and Financial Institutions
• Bangladesh Bank: Prudential Regulation for Banks — Selected Issues
• Bangladesh Bank: Regulations and Guidelines
• BFIU: AML/CFT guidance notes
• BFIU: circulars
• Bangladesh Bank: circulars and circular letters

Frequently Asked Questions