In Bangladesh, wetlands were not considered valuable resource, and their complex ecological and hydrological functions were mostly unrecognized. Nevertheless, the situation has changed. Now a day it is an important issue of concern especially in planning as the value of wetlands are recognized and realized. In spite of having policies, the situation is going to be worsen from worse. Most of the wetlands of Dhaka city are now in worse condition. Reduction due to encroachment is a common phenomenon. Water Supply and Sewerage Authority identified 18 canals of Dhaka city which can be identified now hardly due to illegal occupancy. This work identifies some causes of wetland reduction and the causes behind the worse performance of policies. And at the end, some recommendations are suggested analyzing the past and present scenario to overcome these problems. This work was mainly a dissertation where the aim was to provide some direction that can be used for implementing the existing policy for the protection of water bodies & to make some new policies or guiding principles for protecting the water bodies of Dhaka city as it is one of the most important issues for the city?s existence.