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This study explored the immediate need of developing artificial intelligence (AI) policy in Bangladeshi higher education institutions by conducting in-depth interviews with ten university teachers and ten university students. The research exposed the significant policy deficiencies; ethical dilemmas; and governance considerations related to academic use of AI. Results revealed that, although AI adoption in higher education institutions was expanding rapidly, the lack of fully-fleshed institutional policies resulted in governance vulnerabilities and threw doubt on academic integrity and access equity. The study stressed the imperative for immediate policy actions towards filling up the policy void and ensuring responsible AI integration in the higher educational landscape in Bangladesh.