Abstract: The financial system is mostly controlled by the central bank of a country. Bangladesh Bank, being the central bank of Bangladesh, performs supervisory activities in order to maintain the efficiency, solvency, and overall stability in this sector. As depositors’ interests are highly protected by the strong regulations of the central bank, this paper focused on the impact of Bangladesh Bank’s supervision on bank performance. This paper has presented the performance of the banks over the years (from 2004 to 2015) based on different performance indicators using trend analysis tools. This paper demonstrates supervision has a great impact on bank performance but it’s not the only curb to maximize the bank’s performance. Government influence and the political stability of the country affect the bank’s performance too. On-site supervision and Off-site supervision are used by Bangladesh bank with so many management layers. The impact of the supervisory initiative on the overall banking industry has been portrayed throughout the research. This research can be supportive to all the stakeholders of the banking industry to take more precise decisions. The government can ensure more power to Bangladesh Bank to confirm the proper actions and their implementation of the supervisory decision. Financial institutions need to show their commitment to supervisory rules and regulations formulated by Bangladesh Bank from time to time to keep the positive momentum intact within the industry. Key
Keywords: Supervision, Capital Adequacy, financial institution, Bangladesh bank, ROA, ROE