Regulators: who oversees what

What is a regulator?

A regulator is a public authority created by law to keep watch over a particular kind of financial institution. It usually does four things: licenses who may do business, makes the rules, inspects and supervises regularly, and takes action such as fines or cancelling a licence when rules are broken.

In Bangladesh no single regulator oversees everything. There is one for banks, another for the stock market, another for insurance. So when something goes wrong, the first question is which regulator the institution falls under.

Why it matters to an investor

• To check a licence before handing over money: seeing whether an institution that takes deposits or offers investments is licensed by any regulator is the simplest way to avoid fraud.
• To know where to complain: going to the wrong door wastes time. Bank complaints go to Bangladesh Bank, share complaints to BSEC.
• To know what protection exists: under the Deposit Protection Act 2026, deposits at banks and finance companies are protected up to Tk 2 lakh per depositor (finance companies are to join by 1 July 2028). Shares, mutual funds and insurance have no such protection.
• Regulators’ decisions move markets: changes to interest rates, stock market rules or insurance regulations can change investment returns.

The main regulators and what they cover

• Bangladesh Bank (Bangladesh Bank Order 1972): the country’s central bank. It supervises banks, finance companies and mobile financial services (MFS); it runs monetary policy, issues the currency and manages foreign exchange reserves.
• Bangladesh Securities and Exchange Commission, BSEC (1993 Act): the capital market regulator. It covers the stock exchanges, brokers, merchant banks, asset managers, mutual funds and IPOs.
• Insurance Development and Regulatory Authority, IDRA (2010 Act, operating since 2011): covers life and non-life insurers and insurance agents.
• Microcredit Regulatory Authority, MRA (2006 Act): licenses and supervises NGOs and institutions that provide microcredit.
• National Pension Authority (Universal Pension Management Act 2023): runs the universal pension scheme.
• Department of Cooperatives (Cooperative Societies Act 2001): registers cooperative societies. A cooperative is not a bank, and money kept with one has no deposit protection.
• Sanchayapatra and post office savings: the government’s own schemes, run by the Department of National Savings.

The front-line watchers

Below the main regulators, some institutions help with day-to-day oversight. In the stock market, the Dhaka and Chittagong stock exchanges watch their member brokers’ trading and handle complaints against brokers. The central depository (CDBL) keeps the electronic record of the shares in your BO account. Every bank and insurer must also keep its own complaints cell.

What a licence means, and what it does not

• A licence means the institution operates legally and is subject to rules. There is somewhere to complain.
• A licence is not a guarantee of profit. Licensed institutions can lose money and even fail. Regulators reduce risk; they do not remove it.
• If an institution sits under no regulator yet takes deposits or promises “guaranteed” high profits, the routes to getting money back are very limited if things go wrong.

Common mistakes

• Trusting an advert because it shows a government logo or says “government approved”. Check the licence against the regulator’s own website.
• Assuming Bangladesh Bank oversees every financial institution. Shares, insurance, microcredit and cooperatives have different referees.
• Thinking a licence means there is no risk.
• Thinking deposit protection also covers shares, funds or cooperatives. It applies only to deposits at banks and finance companies, and only up to a limit.

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