Radio frequency identification (RFID) is an emerging technology, radio wave communication between a microchip and an electronic reader, consisting of data gathering, distribution, and management systems that has the ability to identify or scan information for remoting recognition of objects with increased speed and accuracy. An attempt has been made to know how using of RFID technology helps to improve services and business process efficiency in public and private sectors of Bangladesh. With this aim, we have conducted extensive literature survey. At the end of this attempt, we have come to the conclusion that the potential use of this technology includes RFID chipped passports, human implants, item-level tagging, inventory tracking and access control systems. RFID technology is at its early stage of adoption in Bangladesh with a few business applications and pilot studies. However, when tags begin to be associated with individuals, privacy is threatened. RFID is a new type of threat to personal information and must be treated as such; indeed, it must be recognized that existing privacy legislation is not adequate. This paper also explores some current and emerging applications of RFID in Bangladesh and examines the challenges including privacy and ethical issues arising from its use, as well as addressing potential means of handling those issues.