Bangladesh Bank performs all the functions that a central bank of any country is expected to perform and such functions include maintaining the price stability through economic and monetary policy measures, managing the country's foreign exchange and the gold reserve and regulating the banking sector of the country. Like all other central banks across the globe. Bangladesh Bank is both the Government's banker and the banker's bank, a 'Lender of the last resort'. Bangladesh Bank, like most of the central banks of different countries, exercises monopoly over the issue of currency and banknotes. Bangladesh Bank has been entrusted with all the traditional central banking functions including the sole responsibilities of issuing currency, keeping the reserves, formulating and managing the monetary policy. 

With the provisional constitution of Bangladesh Bank order 1972. Bangladesh Bank exercises all powers of regulate commercial banks. These roles are as follows: 

1) Restrictions on branching and new entry; 

ii) Restrictions on pricing (interest rate controls and other controls on prices or fees); 

iii) Restrictions on the portfolio of assets that banks can hold; 

iv) Compulsory deposit insurance (or informal deposit insurance, in the form of an expectation that government will bail out depositors in the event of insolvency); 

v) Capital-adequacy requirements; 

vi) Reserve requirements (Requirements to hold a certain quantity of the liabilities of the central bank). 

vii) Requirements to direct credit to favored sectors or enterprises. 

viii) Special rules concerning mergers or failing banks. 

Central bank is an apex institution in the banking system. The main objective of the central bank is to control regulate and stabilize the banking and monetary structure of the country.