New supervision framework to be implemented in all scheduled banks from January to ensure transparency and sustainable economic growth

Bangladesh Bank has announced the implementation of a new Risk-Based Supervision (RBS) system for all scheduled banks in the country, starting from January 1. The move is aimed at enhancing transparency, accountability, and effective monitoring across the banking sector, which is expected to contribute to long-term financial stability and sustainable economic growth.

The central bank unveiled the initiative during a press conference held at its headquarters on Monday. Governor Ahsan H. Mansur stated that the RBS framework would improve the efficiency of supervisory processes and strengthen the capacity of Bangladesh Bank to manage systemic risks within the financial sector.

According to the Governor, a pilot program involving 20 banks has already been completed successfully, and the remaining banks are expected to be brought under the new system within the next six months. The RBS framework introduces a more structured and analytical approach to banking supervision, focusing on early identification and management of risks that could potentially threaten financial stability.

The RBS model includes several core components, such as the formal introduction of the framework itself, organizational restructuring within the central bank, the design and rollout of specialized training programs for senior management, and the implementation of a Rationalized Input Template (RIT) system for data-driven oversight. In addition, the model emphasizes a continuous cycle of risk assessment, planning, monitoring, and supervision to ensure a proactive regulatory environment.

Governor Mansur noted that high-level meetings have already been held with senior officials of Bangladesh Bank, including executive directors and department heads, to ensure smooth implementation of the new supervision method. Consultations have also taken place with chief executive officers of scheduled banks to align expectations and facilitate coordination.

The central bank emphasized that adopting this new framework is essential to address emerging challenges in the banking sector, especially in a rapidly evolving financial landscape marked by increasing complexities, technological advancements, and cross-border financial movements.

By transitioning from a traditional compliance-based supervision model to a risk-oriented approach, Bangladesh Bank aims to allocate its supervisory resources more effectively, focusing on banks with higher risk exposure and operational vulnerabilities. This shift is also expected to foster a more responsible banking culture, encouraging institutions to adopt stronger risk management practices and governance standards.

In its official statement, Bangladesh Bank expressed confidence that the initiative would solidify the foundation of the country's financial system and serve as a catalyst for broader economic development. The implementation of the RBS model aligns with global best practices in central banking and reflects the regulator’s commitment to ensuring a resilient and forward-looking financial infrastructure.