Local police chief Jane Alam said most passengers were asleep as the boat rammed a cargo vessel and sank on Saturday night in the middle of the river Surma at Alipur, 240km northeast of the capital Dhaka.
Police found five more bodies after a fresh search inside the salvaged boat early yesterday morning, bringing the toll to 37, Mr Alam said. 'Of the 37 dead, 17 are women and 20 children. Most of the male adults have swum ashore and gone back to their villages,' he said.
Divers brought from Dhaka scoured the river and searched the accident site to look for more bodies, as hundreds of people crowded the river banks desperate for news of their relatives.
'They have dived to the riverbed and searched miles downstream as some bodies may have been washed away,' Mr Alam said, adding the chances of finding any more survivors were slim due to strong currents and cold water.
Police said that interviews with relatives suggested that several people could still be missing.
Fishing boats had rescued many survivors from the water, and both the passenger boat and the cargo vessel had been pulled to the river bank.
Survivor Ajman Miah, who lost his wife and two children, told reporters the boat was packed with stone quarry workers and their families.
Villagers with torches and kerosene lamps started the rescue work on Saturday night after survivors swam ashore and raised alarm, he said.
Local government administrator Mohammad Abul Hashem said initial investigations suggested overcrowding and poor visibility on the river were to blame for the accident. 'It appears that boat was overloaded. People were crammed on its deck.'
The disaster happened in one of the most remote areas of Bangladesh, accessible only by river.
Boat accidents due to lax safety standards and overloading are common in Bangladesh, which is crisscrossed by 230 rivers.
At least 85 people drowned in November last year when an overloaded triple-decker ferry capsized off Bhola Island in the country's south.
A week later another boat sank in the same part of the north-east as Saturday's accident, leaving 46 people dead.