One of the key issues facing fishery managers, policy-makers and researchers has been acknowledging local institutions and rule systems for managing common pool resources. In this paper, we discuss local institutions and rule systems of community fisheries from two oxbow lake Fisheries in Southern Bangladesh. Both of the fisheries have been under private and state management systems resulting in different management outcomes. Control of fishers and stocking for production enhancement have been key management options of the lakes, but progress has not been satisfactory due to higher associated costs of management and uneven resource benefits distribution. On the other hand, community fisheries have focused on sharing benefits, controlling access, avoiding conflict and maintaining ecosystem health. Community fisheries have been managed through local rules and management practices above and beyond government regulations. Taking community fisheries in Bangladesh as a model fisheries and examining local rules as an effective means of controlling fisher access to a common resource, we explore here the impacts of local rules that have had different levels of governance outcomes in relation to state and private systems. Data were collected using semi-structured interviews (40 individuals) and group meetings (one for each site covering 15–20 individuals). Reviews of secondary records also support the analysis. Findings of this study highlight the advantages of local rules and also raise questions about how differential property rights and lack of negotiation power of local communities have constrained the success of community fisheries. At the group level, the capacity of local fishers to make their own rules and implement them locally is a critical factor for community fisheries systems.