Financial system plays a significant role to spur economic growth through capital accumulation and efficient distribution of resources. As an alternative to conventional financial system, Islamic finance has emerged to fulfil the demand of Muslim population but not limited to it. Islamic banking is now considered a mainstream industry and has been growing significantly, especially in Muslim countries. Bangladesh has marked impressive growth rate for past several years and Islamic finance has been gaining market share in the country. Even though the studies on finance-growth nexus has been done extensively, to the best of the author's knowledge, no studies have been initiated based on distinct Islamic finance and conventional finance framework. Therefore, this study attempts to find the long-run relationship and short-run dynamic interactions among Islamic finance development, conventional finance development and advancement of the economy of Bangladesh. Annual data from 2001-2019 have been collected for the research. The study employs Vector Error Correction Model (VECM), Granger Causality and Impulse Response Function (IRF) approaches to investigate the relationship.