The ferry was heading to Paturia from Daulatdia in Rajbari when it was hit by a cargo trawler, a senior police official of Manikganj district said.
At least 33 people were killed in the incident, 'The Daily Star' reported. The identities of the deceased were not immediately known but they included many women and children.
A six-month-old girl was among the dead, who after being rescued from the PadmaRiver in which the ferry sank was later declared dead at the hospital.
The death toll is expected to rise. The latest maritime tragedy is Bangladesh's deadliest since August last year when around 130 people were killed after a ferry sank in a river.
A survivor said his wife and mother-in-law are still missing. Another survivor, who was near the edge of the ferry before it sank, said the people in the cabin did not get a chance to escape.
Many passengers were rescued by nearby boats and a joint salvage operation by naval authorities, including the Bangladesh Inland Water Transport Authority, is still underway.
At least 60 people were rescued, according to the report. The master of the cargo vehicle Nargis-1 and his assistant was detained on the charges of hitting the ferry. Their cargo trawler was also seized.
Ferry disasters are common in Bangladesh due to poor safety standards. On February 13, at least five persons, including a minor, were killed when an overloaded ferry carrying 200 passengers, mostly devotees, capsized in the PairaRiver.
Last month, rescuers recovered eight bodies from a fishing boat that capsized in the Bay of Bengal off the Bangladesh coast carrying migrants to Malaysia.
Image for representational purpose only.