Access to local justice resolutions is significant not only for the rule of law but also for human rights, democratic governance, poverty reduction and security. Since many rural residents do not have access to formal courts, local justice resolution, namely village court (VC), is the only restorative mechanism in Bangladesh that is accessible and convenient for the grassroots community. This study investigates the management of restorative justice in Bangladesh and evaluates its effectiveness in terms of participation, accountability and transparency. Using key informant interviews and focus group discussions with Union Parishad officials and locals, the study collected empirical data from 60 respondents, who were purposefully selected from four unions covering two districts in Bangladesh. To understand judicial proceedings and interpret the data accordingly, the research team also observed the hearing procedures of the VC with the permission of the proper authorities. Since the local justice resolution system only handles minor and petty cases related to civil and criminal matters, the study indicates that the VC allows a great deal of popular participation in adjudication processes and ensures partial transparency through an open hearing system without incorporating formal mechanisms of accountability. This analysis also shows that ensuring good governance practices in the VC becomes imperative for impartial and credible justice for the local community. Despite having several gaps in the governance framework and drawbacks, the study concludes that a strengthened restorative justice mechanism might contribute to the performance of the formal judiciary, provide a feasible option for locals, and empower them. Therefore, ensuring good governance requires a comprehensive approach that looks beyond legal and judicial reforms and tackles broader structural, social and economic factors. By exploring governance performance and gaps in the local justice system, the article significantly contributes to the government’s and policymakers’ efforts to measure progress and reduce weaknesses. Although the VC system is still relatively new in many countries, it could be an excellent resource for restorative justice systems across the globe.