Zia, 68, the chief of the main opposition Bangladesh Nationalist Party (BNP), appeared before the court after skipping 41 hearings in the past.
She was charged along with her fugitive elder son and BNP's senior vice president Tarique Rahman and four others in connection two charitable organisations, which allegedly existed in papers alone.
If convicted, the two-time former premier might be jailed for life.
The indictment came after hours of pandemonium which forced Judge Bashudev Roy to briefly leave the courtroom twice as the pro-BNP lawyers shouted, demanding adjournment of the hearing and allowing Zia to move to the High Court. Her legal team said that Zia had no confidence in the court.
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During the past military-backed interim government, the Anti-Corruption Commission (ACC) in July 2009 filed a graft case against Zia, Rahman and four others for embezzling nearly USD 1 million by forming the "fake" trust.
Two years later, another case was filed against her and three others for abusing power in setting up the Zia Charitable Trust.
The two charities were named after Zia's assassinated husband president Ziaur Rahman. The ACC alleged that the accused received money from United Saudi Commercial Bank in 1991 for the welfare of orphans but the Zia family "in connivance with other accused withdrew the money by issuing four cheques and embezzled the amount".
Zia and her two sons, currently staying abroad, are facing 20 graft cases. The charge against her dates back to her tenure as Prime Minister from 2001-06.
Zia's legal team said the charges were "false and fabricated" and are part of a conspiracy to tarnish her and her family.
The case against her could heighten political tension in the country as the fiery leader has vowed to topple the current government led by Sheikh Hasina.
The BNP had boycotted the January 5 general election won by Hasina, terming it as a farce.