At least people have died and dozens more are missing after a ferry carrying about 200 people capsized in a river in southern Bangladesh.

Local police chief Mohammad Shahabuddin Khan said about 35 people were rescued from the ferry, which sank on the Meghna River after colliding with a cargo boat.

Divers have recovered 30 bodies from the wreckage, including a young woman found cradling her baby's lifeless body.

"The death toll is likely to rise as more bodies are feared trapped inside," Khan told the Associated Press. "We will get a better picture of the casualties once the sunken ferry is pulled out of the water."

The MV Shariatpur-1 was travelling to the capital, Dhaka, from neighbouring Shariatpur district. The accident occurred in Munshiganj district, about 20 miles south of Dhaka.

Rescued passengers claimed the boat was overcrowded. The exact number of people on board is unclear, because passenger lists are not maintained and many people purchase their tickets when they board.

Khan put the number at close to 200 passengers but survivor Dulal Dewan said that about 300 people were on board when the double-deck ferry sank.