Dhaka is the primate city of Bangladesh. It is the most important economic, social and political area. This is why the issue of sustainability is one of the key issues regarding any type of Development in Dhaka. To save Dhaka, Government of Bangladesh took various measures. DMDP is one of them. To promote a sustainable development, DMDP suggested protecting its surrounding water bodies. In spite of having DMDP, Most of the wetlands of Dhaka city are in worse condition now. Reduction due to encroachment is a common phenomenon. In spite of having policies, the situation is going towards worsen from worse. There are 19 canals which are needed to recover for the well functioning of the drainage system which can be identified now hardly. If the situation goes in this way, the future will become a nightmare for the habitat of the city as wetland are important for ground water recharge, water supply and drainage system besides ecological balance. This paper identifies some causes of wetland reduction and the causes behind the worse performances of policies. At the end of this paper some recommendation are suggested from analyzing the past and present scenario to overcome this problems.