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Introduction
Introduction
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Chapter 1
1.1. Introduction
The Green Banking is now popular worldwide now-a-days. It is for stopping the
environmental degradation and making this planet habitable. The concept of Green Banking was developed in
the western countries. Green banking is a general term, which can cover multitude of areas from a bank
being environmentally friendly to how and also where their money is invested. Defining green
banking is relatively easy. It means promoting environmental -friendly practices and
reducing carbon footprint from banking activities. A green bank is a bank that promotes
environmental and social responsibility but operates as a traditional community bank and
provides excellent services to investors and clients. Its progressive approach to the community
and the earth makes it different from the crowd. A g reen bank is also called ethical
bank, environmentally responsible bank, socially responsible bank, or a sustainable bank, and is
expected to consider all the social and environmental factors. Green banking involves pursuing of
financial and business policies that are not hazardous to environment rather help conserve environment.
The broad objective of green banking is to use resources with responsibility and giving priority
to environment and society. It is more about focusing on 'mother planet and its sustainability',
shifting from a traditional approach on 'profit' or even 'people'. Green banking is not just another
corporate social responsibility (CSR) activity; it is all about going beyond to keep this world livable without
much damage. Green banking, which considers all the social and environmental factors,
is also called’ ethical banking'. Ethical banks started with the aim of protecting the
environment. These banks are like normal banks that aim to protect the environment and are
controlled by the same authorities. Green banking, compared to normal banking, attaches more
importance to environmental factors. Its aim is to provide good environmental and social
business practices. It checks all the factors before considering a loan whether the project is
environment-friendly and has any implication on the future of people and planet. On would be awarded a
loan only when all environmental safety standards are followed. Basically, green banking avoids as much
as paper work as possible - from go-green credit cards and go-green mortgages to all transactions
done online. It creates awareness around business people about environmental and social
responsibility, enabling them to adopt environment friendly business practices, and follows
environmental standards for lending. When a person is awarded a loan, the interest is less
than normal banks because ethical banks give more importance to environment-friendly
factors - they do not operate with high interest rates only. The world has seen much focus on
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economic progress and mankind has made giant steps in its journey through time. The side-
effects of the development process have, however, also been equally enormous–loss of
biodiversity, climatic change, environmental damage, etc. Environmental issue such as,
restoration of nature’s face of beauty have also become more important as the world has
progressed economically. Bangladesh is, a low carbon emitting country even among the
developing countries, likely to be one of the worst sufferers of Global Warming. It is
experienced that climate change has already enhanced the frequency and intensity of floods,
droughts and cyclones in Bangladesh, and would have negative impact on water resources, land,
crop agriculture and food security, fisheries and livestock, forestry and bio-diversity, and human
health as well. Banks hold a unique position in an economic system that can affect production,
services, business and other activities through their financing activities and thus may contribute
to removing polluted environment. The banks should go green and play a pro-active role to take
environmental and ecological aspects as part of their lending and investment principle, which
would direct industries to go for mandated investment for environmental management, use of
appropriate technologies and management systems. Green Banking means eco-friendly or
environment-friendly banking to stop environmental degradation to make this planet more
habitable. This comes in many forms. Providing innovative green products: using online banking
instead of branch banking, paying bills online instead of mailing them, purchasing green
mortgage, opening up of CDs, green credit cards and money market accounts at online banks
instead of large multi-branch banks or finding the local bank in your area that is taking the
biggest steps to support local green initiatives. Green Banking is also a multi-stakeholders'
endeavor where banks have to work closely with government, NGOs, International Financial
Institutes, International Government Organizations, Central Bank, consumers and business
communities to reach the goal. A Green Banking is an ethical banking/ social banking (“banks
with a conscience”-Benefiter, 2011) as there is a strong building block which is corporate social
responsibility (CSR) within the agenda of green banking. CSR bind banks in a relation with
society/people showing the caring face of it in different situation, especially, in crisis period.
Furthermore, Green Banking is regarded as sustainable banking, which has a role to safeguard
the planet from environmental degradation, with the aim of ensuring economic growth which is
sustainable. To implement “Green Banking”, Bangladesh bank has developed the regulations of
Green banking in the year 2011. Bangladesh Bank is the World’s first central bank, which has in
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depth and apparent knowledge on green banking. State Owned Bank, State Owned Commercial
Bank, Private Commercial Bank and Foreign Commercial Bank etc., all banks are working
diligently on Green Banking as instructed by Bangladesh Bank. As per Bangladesh Bank’s data
on “Green Banking” 2013, all scheduled banks have developed their own Green Banking Policy
and Green Banking unit. After increasing the environmental risks, banks have distributed
793,561.25 million Taka in 10,868 projects. In year 2012, banks have distributed 270,921.53
Million Taka as Green Financing. Banks have been
encouraged to utilize the 258.89 Million Taka as CSR (Corporate Social Responsibility) in Green
Banking Activities and Green Projects. They have concentrated on Green Marketing, Training
and Development utilizing 90.42 million taka from their fund. Current situation of online
banking is, 3445 branches among 8392 branches (41.05%) are completely technologically
enriched. State Owned Banks and Specialized Development Banks have continued working on
online internet and SMS banking initiative.
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1.2. Objectives of Green Banking
The broad objective of the green banks are avoiding waste and giving priority to
environmental and society.
Focusing on environment friendly initiatives by providing innovative financial and ensure
sustainable development.
Keeping the world livable for a long period of time.
To minimize paper works as much as possible inside and outside the bank.
To achieve cost and time efficiency.
Time frame for the research was very limited. The actual survey was done within assort period.
Unavailability of written documents as require for making a comprehensive study.
Some supportive materials were not available during the completion of my project paper i.e. PC,
Internet facility etc.
Green Banking
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1.4. Research Method
In order to make the project paper more meaningful and presentable, data is collected from many
sources. The data collection sources can be accumulated two sources. Majority of the
information was collected from secondary sources. The study is based on secondary data source;
collected data and information have been processed and analyzed systematically. This project
paper has been prepared by latest data to make the study more informative and useful. The
primary data collected from officers, supervisors, clients. The secondary data and information
were collected from
Journal
Books
Newspaper
Internet
Annual Report
Bangladesh Bank Publication
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Chapter 2
Introduction 7
2.1. Comments of experts about Green Banking
"We have to change our mindset about environmental issues for making a better future through greening our
mind," said Bangladesh Bank Governor Atiur Rahman."It is time to focus on protecting our planet
through initiating green banking, because the main objective of green banking is to protect
environment through pursuing environment-friendly financing policies." “Said Mammon Rashid,
Ex. managing director of Citibank NA. "We need to focus on sustainable development approach because
it has a close link with the development of other sectors, banking sector can play a vital role
to encourage other industries to go green through promoting eco-friendly financing schemes says
Bandana Saha, director general for BIBM. ”The banks should priorities loaning the sectors that promote
environmental practices, The banks can also launch green initiatives with their own business
operations through pursuing cost cutting, recycling of materials and equipment and
waste minimization strategies, the financial institutions should initiate 'green office guide' to help
protect thee co-system. Use of online communication in stead of printed documents, installation
of e ne r g y e f fi ci e nt e qui p m e nt , us e of fi l t e r ed wa t e r i n p l a c e of bot t l ed wa t e r
an d encouraging usage of energy efficient cars are some of the examples of practicing
green business” said Shah Md Ahsan Habib, director (training) of BIBM. “We are facing a negative
impact of climate change though we contribute little to global warming, so, we have to focus on
adaptation and mitigation process to cope up the adverse impacts of global warming, and green banking
initiative can facilitate this process." Said Qazi Kholiquzzaman Ahmad, chairman of Palli Karma-
Sahayak Foundation. Green Banking
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customers. The Financial Times of London announced the Sustainable Banking Awards last year.
UK's Cooperative Bank won the 'Sustainable Bank of the Year' award and only
HSBC, among large global banks, was a runner-up in any category. The good news is, BRAC Bank Ltd from
Bangladesh became the regional winner for 'Asian Emerging Markets Sustainable Bank of the Year', which
they are also portraying in all their bill boards and promotion campaigns. Good news for all of us.
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banking policies and establish separate green banking cells and incorporate environmental risk
management strategies by June 30 this year. In this phase, the banks are also advised to introduce green and
create climate risk funds to finance flood, cyclone and drought prone areas at regular
interest rate without charging additional risk premium. Promoting eco-friendly products, supporting
training and events for raising awareness for environmental risk management are also suggested
to include in the regular activities of the bank in the next six months. In the second phase, the
draft suggests banks to take specific policies by June 2012 for different environmental sensitive
sectors such as agriculture, poultry, dairy, farming, tannery, fisheries, textile and apparels,
renewable energy, pulp and paper, sugar and distilleries, construction and housing, engineering
and basic metal, chemicals, rubber and plastic industry, hospital/clinic, chemical trading, brick
manufacturing and ship breaking. During this period, all banks will also set up green branches to use
maximum natural light, renewable energy, energy saving light bulbs and other equipments. During
the same period, they will have to determine a set of achievable targets and strategies, and
disclose these in their annual reports and websites. They will have to set up green branches.
The banks should increasingly rely on virtual meeting through video conferencing. According to
the draft guideline, banks in the next one year will adopt a green strategic plan, det e rm i ni n g t h ei r
t a r get fo r gr e en ba n ki n g. Th e d r a ft s a ys a s ys t em o f en vi r onm ent management
should be in place in all banks before they step into the third phase of green banking, to be
completed by June 2013.In this final stage, banks will focus on fine tuning of their green
activities and will look for more innovative products and services to expand eco-friendly business and
industries. Commercial banks will have to adopt a comprehensive green banking policy by
December 2013 as part of the central bank's efforts to make banking practices more responsible to social
and environmental causes. The central bank will name top ten banks for their overall performances in
green banking, and will take into account to give it permission to open new branches. In its policy
guideline for green banking, the BB said co-friendly business activities and energy efficient
industries should get preference in financing by the banks. The banks will have to inform the BB of their
initiatives on a quarterly basis within 15 days after the end of a quarter. The first quarterly report
has to be submitted by July 15, 2011.Besides avoiding negative impacts on environment
through banking activities, the banks are expected to introduce environment friendly
green products to address the core environmental challenges of the country. The commercial banks
will now require taking measures to protect environmental pollution while financing a new project or
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providing working capital to the existing enterprises. The guidelines advised the banks to
facilitate their clients with utmost care in opening letter of credit for installation of effluent treatment
plant (ETP) in the industrial units.
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Chlorofluorocarbons (CFCs) and thereby depletion of Ozone layer. As such, every person and
especially the professionals must have greater role to check the environmental degradation. Bankers are
the important professional group who has interaction with the other groups of people and also with general
masses. They can adopt different green activities within their i n - hou s e en vi ro nm ent a nd
al s o c an i ni t i at e t h e pr ot e ct i o n of t h e ai r po l l ut i on , w at e r pollution by their
clients. Bankers can finance the green projects, which are environmental friendly and discourage the
projects that damage the environment. It will be obligatory for each person to show respect to
the environmental issues. Otherwise, the environments where the concerned person lives will be
inhabitable and as whole the country and the globe will no longer be safe place. We have to use
resources carefully and keep in the mind that the reserve of the resources is not
unlimited and its excessive use may endanger the future generation. We have to think
that each of our activity has a specific impact on the environment. As a best creation of Almighty, we have
greater role to conserve the environment, maintain biodiversity, not to endanger other fauna and flora
and above all a green, healthy planet for safe and sound living of our future generations. Since banking
industry Is a vital institution in the economic and business activity round the world, bankers can
not remain indifferent to this burning issue. A banker or a banking industry may address many issues to save
environmental degradation and conserve the ecological balance. Green banking is a good way of
making people aware of global warming. Each businessman will contribute to the environment
and make this earth a better place to live and enjoy. In addition, it is envisaged that this
institution is going to work towards reducing the country’s dependence on foreign energy sources,
fighting climate change and creating additional jobs through the provision of healthier energy
generation facilities. Green finance may cover all the financial services related to the promotion
and development of green industry and green economy where the environmental benefits inters
of reduced carbon dependency or reduced ecological scarcity are the most significant. Green
banking practices of banks are connected with both internal operation and product ecology. Some banks
are engaged in carbon offsetting, which refers to the effort of canceling out the climate-changing
effects of its own greenhouse gas emissions. Banks, by using their commercial lending and
securities underwriting, may catalyze the necessary transition to an economy that minimizes
greenhouse gas pollution and relies on energy efficiency. There is no doubt that the combined
threats associated with climate change and biodiversity loss call for a deeper commitment
of resources and investment from all stakeholders. In the endeavor of emission reduction and
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conservation, stakeholders have been contributing in different ways in different countries and
regions. Green banking is just one of the initiatives by stakeholder - banks and financial
institutions. The environmentally responsible banks do not only improve their own standards but also affect
socially responsible behavior of other businesses. The banks will have to go for online
banking by eliminating paper waste, saving gas and carbon emission, reducing printing
costs and postage expenses.
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2.7.1.4. Sound Pollution
We should keep our voice low when we converse and also convince our client’s maintain this for the sake of
healthy working environment in the branches. Installation of solar panel in the rural branches and using high
mileage vehicles rousing shared vehicles instead of personal vehicle:
Since Bangladesh is an energy deficit country we can install solar panels in all Branches as an
alternative energy source. We can also use the vehicles which consume less fuel which will save
huge fuel import of the country. We can also use big vehicles to carry the employees of the Banks
instead of personal vehicle to reduce fuel as well traffic jam unthreads.
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2.8.1. Green Deposits
Banks can offer higher rates on CDs, money market accounts, checking accounts and savings account if
customers opt to conduct their banking activities online.
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2.9. Prospects of Green Banking
The banking sector may also have significant impacts on biodiversity while providing financial
support to high impact sectors such as forestry, mining, oil and gas, fisheries, and infrastructure. In project
finance, banks may exercise their powers through assuming roles as environmental
policeman to ensure that their borrowers comply with the environmental standards, and
could enter into a partnership with different industries and encourage companies to be more
sustainable. Regulatory enforcement by governments, pressure from the civil society and
consumers, voluntary support, and responses by the business entities are preconditions for
creating a congenial atmosphere for offering and accepting productive green banking services. A common
platform or unique approach by the policy makers and civil society groups in all countries or
regions would give the best result. However, creating a common platform and launching a uniform
approach would require major political effort by all global economies - a tough job.
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Chapter 3
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3.1. Bangladesh Bank's Earlier Initiatives
BB is well aware of the environmental degradation situation as mentioned above and has already
given time to time directions to all scheduled banks. Commercial Banks are now required to
ensure necessary measures to protect environmental pollution while financing a new project or
providing working capital to the existing enterprises. Banks have been advised to facilitate their
clients with utmost care in opening Letter of Credit (L/C) for installation of Effluent Treatment
Plant (ETP) in the industrial units. Banks have been advised to finance in Solar Energy, Bio-gas,
ETP and Hybrid Hoffman Kiln (HHK) in brick field under refinance programmed of BB. A
comprehensive guideline on Corporate Social Responsibility (CSR) has been issued where banks
have been asked to concentrate hard on linking CSR at their highest corporate level for
ingraining environmentally and socially responsible practices and engaging with borrowers in
scrutiny of the environmental and social impacts. Banks have been brought under the purview of
E-commerce with a view to providing the customers with online-banking facilities covering
payments of utility bills, money transfer and transactions in local currency through internet as
well. Considering the adverse effects of Climate Change, banks have been advised to be cautious
about the adverse impact of natural calamities and encourage the farmers to cultivate salinity
resistant crops in the salty areas, water resistant crops in the water locked and flood prone areas,
drought resistant crops in the drought prone areas, using surface water instead of underground
water for irrigation and also using organic fertilizer, insecticides by natural means instead of
using chemical fertilizer and pesticides.
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3.3. Phase-I
Banks are to develop green banking policies and show general commitment on environment
through in-house performance. The time lining for the actions to be taken under Phase-I should
not exceed December 31, 2011.
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3.3.3. Initiating In-house Environment Management
Banks shall prepare an inventory of the consumption of water, paper, electricity, energy etc. by
its offices and branches in different places. Then it should take measures to save electricity,
water and paper consumption. A 'Green Office Guide' or at least a set of general instructions
should be circulated to the employees for efficient use of electricity, water, paper and reuse of
equipment’s. In place of relying on printed documents, online communication should be
extensively used (where possible) for office management and make sure that the printers are
defaulted to duplex for double-side printing to save papers. Banks may apply Eco-font in
printing to reduce use of ink, use scrap paper as notepads and avoid disposable cups/glasses to
become more eco- friendly. Installation of energy efficient electronic equipment’s and automatic
shutdown of computers, fans, lights, air coolers etc. will help reducing electricity consumption.
Energy saving bulbs should replace normal bulbs in branches/offices of the banks. Banks should
make plan to use solar energy at their premises to save electricity. Bank should take steps to save
energy from corporate business travel and encourage employees to purchase energy efficient cars
(That consume less fuel) can reduce gas and petroleum consumption.
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3.3.6. Introducing Green Marketing
Green marketing is the marketing of products that are presumed to be environmentally safe.
Green marketing incorporates a broad range of activities, including product modification,
changes to the production process, packaging changes, as well as modifying advertising. It refers
to the process of selling products and/or services based on their environmental benefits. Such a
product or service may be environmentally friendly in itself or produced and/or packaged in an
environmentally friendly way. Banks should use environmental causes for marketing their
services to consumer. Green marketing is expected to help awareness development among
common people.
3.4. Phase-II
The time lining for the actions to be taken under Phase-II should not exceed December 31, 2012.
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3.4.1. Sector Specific Environmental Policies
Banks need to formulate strategies to design specific policies for different environmental
sensitive sectors such as Agriculture, Agri-business (Poultry & Dairy), Agro farming,
Leather(Tannery), Fisheries, Textile and Apparels, Renewable Energy, Pulp and Paper, Sugar
and distilleries, Construction and Housing, Engineering and Basic Metal, Chemicals (Fertilizers,
Pesticides and Pharmaceuticals), Rubber and Plastic Industry, Hospital/Clinic, Chemical
Trading, Brick Manufacturing, Ship breaking etc.
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should increasingly rely on virtual meeting through the use of video conferencing in lieu of
physical travel which would help saving cost and energy.
3.4.5. Formulation of Bank Specific Environmental Risk Management Plan and Guidelines
A bank should develop and follow an environmental risk management manual or guidelines in
their assessment and monitoring of project and working capital loans. In addition to the
compliance of national regulation the bank may set internationally accepted higher
environmental standards. In this connection, Green initiatives by a group of banks will not only
be effective but will also offer competitive advantage. Bank alliances may prepare standard and
guidelines for themselves for improving Green Banking practices.
3.5. Phase-III
A system of Environmental Management should be in place in a bank before the initiation of the
activities of Phase-III. Banks are expected to address the whole eco-system through environment
friendly initiatives and introducing innovative products. Standard environmental reporting with
external verification should be part of the phase. The time lining for the actions to be taken under
Phase-III should not exceed December 31, 2013.
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3.5.1. Designing and Introducing Innovative Products
Alongside avoiding negative impacts on environment through banking activities, banks are
expected to introduce environment friendly innovative green products to address the core
environmental challenges of the country.
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Chapter 4
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4.1. About Jamuna Bank limited
Jamuna Bank Limited (JBL) is a Banking Company registered under the Companies Act, 1994
with its Head Office at Chini Shilpa Bhaban,3 Dilkusha C/A Dhaka-1000. The Bank started its
operation from 3rd June 2001.
Jamuna Bank Limited is a highly capitalized new generation Bank with an Authorized Capital
and Paid-up Capital of Tk.1600.00 million and Tk.390.00 million respectively. The Paid-up
Capital has been raised to 429.00 million and the total equity of the bank stands at 725.00 million
as on June 30, 2005. Currently the Bank has 61(sixty one) branches.
The Bank undertakes all types of banking transactions to support the development of trade and
commerce of the country. JBL's services are also available for the entrepreneurs to set up new
ventures and BMRE of industrial units.
Jamuna Bank Ltd., the only Bengali named new generation private commercial bank was
established by a group of winning local entrepreneurs conceiving an idea of creating a model
banking institution with different outlook to offer the valued customers, a comprehensive range
of financial services and innovative products for sustainable mutual growth and prosperity. The
sponsors are reputed personalities in the filed of trade, commerce and industries.
The Bank is being managed and operated by a group of highly educated and professional team
with diversified experience in finance and banking. The Management of the bank constantly
focuses on understanding and anticipating customers needs. The scenario of banking business is
changing day by day, so the bank's responsibility is to device strategy and new products to cope
with the changing environment. Jamuna Bank Ltd. has already achieved tremendous progress
within only two years. The bank has already ranked as one of the quality service providers & is
known for its reputation.
Jamuna Bank offers different types of Corporate and Personal Banking Services involving all
segments of the society within the purview of rules and regulations laid down by the Central
Bank and other regulatory authorities.
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4.2. Vision
To become a leading banking institution and to play a pivotal role in the development of the
country.
4.3. Mission
The Bank is committed to satisfying diverse needs of its customers through an array of products
at a competitive price by using appropriate technology and providing timely service so that a
sustainable growth, reasonable return and contribution to the development of the country can be
ensured with a motivated and professional work-force.
Jamuna Bank Limited credit policy is based on green banking concept. The credit policy of the
bank strictly forbids financing in environmentally hazardous industries. To provide special
emphasis, a separate policy namely “Green Banking Policy” Has also been prepared or
formulated based on Bangladesh banks policy guideline on Green Banking, in line with global
development response to the environmental degradation. Thus the policy is being implemented
in phases.
Providing a safe and healthful workplace and ensuring that personal are properly trained
with appropriate safely and emergency equipment.
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Participating in efforts to improve environmental protection, understanding and sharing
appropriate pollution prevention technology, knowledge and methods.
Using and encouraging use of methods that do not adversely affect the environment ,
including developing and improving products, operations and technologies to minimizes
waste, prevent, air, water and other pollution, minimize health and safety risks and
dispose of waste safely and responsibly.
Ensuring that JBL makes responsible use of energy including conserving energy,
improving energy efficiency and giving preference to renewable energy sources when
feasible.
Allocating a separate fund in their annual budget allocation for green Banking.
Introducing Green Finance: Jamuna Bank Limited will give preference in financing Eco-
friendly business activities and energy efficient industries.
Creating Climate Risk Fund: Bank shall finance the economies activities in the flood,
cyclone and drought prone areas at the regular interest rate without charging additional
risk premium.
Introducing Green Marketing: Green marketing is the marketing of products that are
presumed to be environmentally safe.
In line with above Jamuna Bank Limited established Green Banking unit headed by a senior
executive. To create awareness about Green banking and develop necessaries skill intense
training program has been undertaken.
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4.5. Jamuna Bank Green Banking Implementation
2 To form high powered Jamuna Bank limited has formed high powered
committee comprising of committee comprising of directors.
directors
3 To allocate fund for green JBL fund will be allocated at the time of
banking in annual budget preparing annual budget.
6 To prepare an inventory of JBL all the offices and branches have been
consumption of water , advised to prepare inventory of consumption of
paper, electricity, energy water, paper, electricity, etc. which is under
etc. by offices and branches process.
in different places
7 To prepare a set of general JBL a set of general instruction has been prepared
instruction and circulate to and circulated to the employees for efficient use
the employees for efficient electricity, water, paper and reuse of equipment’s.
use electricity, water, paper
and reuse of equipment
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8 To use online In place of relying on printed and copied
communication in place of documents, online communication is being
relying on printed extensively used through FTP (file transfer
documents and to set protocol). Instructions have been issued to set
printers defaulted to duplex printers defaulted to duplex, where possible.
for double side printing Follow up is going on in this regard.
12 To replace normal bulbs by JBL does not use any tungsten bulb. Some tube
energy efficient bulbs lights are in use which shall be replaced with
energy efficient bulbs.
13 To make plan to use solar JBL will gradually opt for using solar energy at
energy at the premises to the premises to save electricity. Mentionable, JBL
save electricity has established solar system in a remote “Char” of
Kishoregonj as part of its CSR activities.
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efficient industries are given preference in
financing. Green financing will be included as
priority sector in the next annual credit plan.
16 To create climate risk fund JBL Creation of climate risk fund is under
process.
To save our beloved earth from the disaster of Green House Effect, Jamuna Bank is offering
ECO friendly product ‘Jamuna Green’. Under this product, you can get finance for ETP plants in
different sectors, Eco friendly vehicles, Eco friendly fields (reduce CO2 emission), Bio
Fertilizer, Bio gas plants, Solar plants and Eco friendly any other business. Mode of finance shall
be Term Loan mainly. Jamuna Bank Limited adopts the green banking business model for
sustainable banking by launching the following strategies:
4.6.1. Carbon Credit Business: Clean Development Mechanism (CDM) provides for
cooperation between developed and developing countries. The operational mechanism of CDM’s
involves an investment by a legal entity from a developed country to developing country, which
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results in emission reduction. These emission reductions have to be certified by an appropriate
authority and these Certified Emission Reductions (CERs) are commonly known as Carbon
Credits. The banks can involve themselves in carbon credit business, wherein banks can provide
all the services in the area of CDMs and carbon credits and the services of identification and
funding of CDMs projects, advisory services for registration of CDM projects and
commercialization of CERs under different structures to meet the requirements of its customers.
4.6.2. Green Banking Financial Products: Jamuna Bank limited will develop innovative green
banking financial products which can directly or indirectly contribute to the reduction of carbon
emissions. Jamuna Bank limited will introduce “Green Fund” to provide finance to climate
conscious customers as an option of investing in environmental friendly projects. Besides
introducing specific green banking products bank will incorporate an Environmental Impact
Assessment (EIA) in the project appraisal while financing any project to measure the nature and
magnitude of environmental risk mitigation measures.
4.6.3. Green Mortgages: Jamuna Bank Limited will offer special discount to the borrower who
will provide mortgage of land and buildings which are greener. This initiative will induce use of
more energy-efficient materials and building plans. Jamuna Bank limited will not allow the land
as mortgage that is prone to environmental impacts by virtue of its geographical location and
polluted by the operation business activities. As a mortgage preference will be given to the
buildings those are designed and constructed with energy efficient items such as solar panels and
improved insulation.
4.6.4. Carbon Footprint Reduction: Carbon foot-print is a measure of the impact of our
activities on the environment. It relates to the amount of GHG we are producing in day-today
business while burning fossil fuels for electricity, heating, transportation etc.Jamuna bank limited
will take the following measures to reduce the carbon footprint
4.6.4.1. Paperless Banking: Jamuna bank limited is computerized with all branches; there is
ample scope for doing paperless or less-paper banking. Normally banks use huge quantity of
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papers for office correspondence, recording public transactions and reporting, etc.Jamuna bank
limited will switch over to electronic correspondence and reporting more effectively and the
customer would be encouraged and popularize e-statements.
4.6.4.3. Using Mass Transportation System: Jamuna Bank limited will take the policy for
mass transportation for staffs working in one place.
4.6.4.4. Green Building: Jamuna Bank limited gradually will build their office building as per
the code of green building to reduce their carbon footprint as well as to save the cost.
4.6.4.5. Social Responsibility Services: As part of the green banking strategies, Jamuna Bank
limited has initiated a number of social responsibility services like tree plantation campaign, park
development, pollution checkup camps etc.
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Chapter 5
34
5.1. United Commercial Bank Limited
The globe is encompassing immense environmental effects due to the activities of business,
industries and financial houses. Moreover, the effects of climate change also create specific
environmental issues for the enterprises and living beings at large. On the other hand, in-house
consumption and use of paper, electricity, water, fuel, stationeries, equipment’s, technologies,
etc. of the business and financial institutions pollutes the environment in different ways and
capacities. As such, the society demands that the Banks and financial institutions should take
responsibility for keeping the environment green and safeguarding the planet. Bangladesh is
enormously affected from the events of environmental and climate change in recent years.
Realizing the fact, the Board of Directors in its 325th meeting held on 28.12.2011 has approved a
Green Banking Policy for the Bank.
The Audit committee of the Board of Directors will act as the high-powered committee, which
will supervise the overall activities of the Green Banking Unit/Cell and review the policies,
strategies and programs of the Bank. A separate Green Banking Unit/Cell has also been
established comprising members from General Banking and Development Division, Corporate
Affairs Division, Corporate Banking Division, Credit Risk Management Division, General
Services Division, Human Resources and Management Division and Information and
Technology Division and headed by a Deputy Managing Director. The Unit/Cell will have the
responsibility of designing, evaluating and administering related green banking issues of the
bank. The Unit/Cell will report to the high-powered committee of the Board as well as to
Bangladesh Bank quarterly. As the phase-based activities of Green Banking cover wide range of
area, responsibilities of different Divisions are specified in the Policy. The purposes of Green
Banking Policy of the Bank are to ensure necessary measures to protect environmental pollution
while providing service or financing customers as well as to improve in-house environment
management through efficient use of various resources (i.e. reduce usage of paper, water, use
energy efficient lights and equipment’s, etc.) at Head Office, Branches and other link offices.
Apart from enrichment of the external environment, Green Banking will help improve the
performance of the Bank in the following ways:
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Improve the image of the Bank by showing and serving its commitment to the
environment
Significantly reduce operational cost due to less consumption of office stationeries,
energy and water.
Enhance productivity as well as efficiency of the employees through skilled & optimum
usage of technology
Reduce possible health hazards by installing eco-friendly equipment’s
Save significant portion of Forestry by reducing paper usage
Lessen emission of Green House Gases (GHGs) through making less corporate travelling
through teleconferencing as well as arranging transport pool for the employees
Help develop customer’s consciousness on environment by arranging awareness
development program
Reduce the extent of Non-Performing Loans (NPLs) if investment goes to less risky projects
The Green Banking Policy, which comprises of five chapters, is to be implemented in 3 (three)
phases within December 31, 2013 as per the direction of Bangladesh Bank from time to time and
will continue further. Apart from an introduction and an ending chapter, activities under different
phases are elaborated in three chapters. The Green Banking Policy also encompasses the
Environmental Risk Management Policy and covers the overall environmental concerns – arising
out of both external or internal sources and the respective measures to manage it.
All concerned Divisions are, therefore, advised to exercise all out efforts for effective
implementation of Green Banking Policy to improve in-house environmental management
through efficient use of various resources (i.e. reduce usage of paper, water, use energy efficient
lights and equipment’s, technologies, etc.) as well as to protect environmental pollution while
financing.
5.1.1. Background
The environment and climate change effect on human existence as well as the planet are now a
global concern because the changes have direct impact on biodiversity, agriculture, forestry, dry
land, water resources and human health. The key areas of environmental degradation cover air
pollution, water pollution and scarcity, encroachment of rivers, improper disposal of industrial
36
medical and house-hold waste, deforestation, and loss of open space and loss of biodiversity. The
state of environment of Bangladesh is rapidly deteriorating. Moreover, Bangladesh is one of the
most climate change vulnerable countries. In line with global development and response to the
environmental degradation, financial sector/Banks in Bangladesh can play important roles as one
of the key stakeholders. Banks hold a unique position in an economic system that can affect
production, business and other economic activities through their business activities and thus may
contribute to pollute environment. Moreover, energy and water efficiency and waste reduction
are of high concern for Banks.
5.1.3. Purpose
The purpose of Green Banking Policy will be to ensure necessary measures to protect
environmental pollution while providing service or financing customers as well as to improve in-
house environment management through efficient use of various resources at Head Office,
Branches and other link offices.
5.1.4. Scope
This policy document will be applicable for issues related to Green Banking with respect to
activities of the Bank and its customers that have impact on the environment.
5.1.5. Benefits
Apart from enrichment of the external environment, Green Banking may also help improve the
performance of the Bank in the following ways:
37
Improve the image of the Bank by showing and serving its commitment to the
environment
Significantly reduce operational cost due to less consumption of office stationeries,
energy and water.
Enhance productivity as well as efficiency of the employees through skilled & optimum
usage of technology
Reduce possible health hazards by installing eco-friendly equipment’s
Save significant portion of Forestry by reducing paper usage
Lessen emission of Green House Gases (GHGs) through making less corporate travelling
through teleconferencing as well as arranging transport pool for the employees
Help develop customer’s consciousness on environment by arranging awareness
development program
Reduce the extent of Non-Performing Loans (NPLs) if investment goes to less risky
projects
5.1.6. Implementation
The Green Banking Policy of the Bank will be implemented in 3 (three) phases as per the
direction of Bangladesh Bank from time to time. Activities under different phases are elaborated
on later chapters.
5.2.1. Phase – I
Activities under Phase – I are to be completed by December 31, 2011 or within extended time
allowed by Bangladesh Bank. This phase includes developing Green Banking policies and shows
general commitments on environment through in-house performance.
5.2.2. Policy formulation and Governance
The Audit Committee of the Board of Directors of the Bank will act as the high powered
committee, who will be responsible for reviewing the banks environmental policies, strategies
and program every year.
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5.2.3. Incorporation of Environment Risk in CRM
The Bank will comply with the instructions stipulated in the detailed guidelines on
Environmental Risk Management (ERM) in consideration of a part of the Green Banking Policy.
With a view to incorporating Environmental and climate risk as part of existing credit risk
methodology to assess a prospective borrower, Bank’s ERM Policy has been designed in line
with Bangladesh Bank guidelines. From now Environmental and Climate Change Risk will be
considered as part of the existing credit risk methodology of the Bank to assess a prospective
borrower. In this connection, specific check list should be followed by all concerned and be also
included in the audit guidelines and reporting formats. Such incorporation will help review
possible sources of Environmental Risk under Environmental Due Diligence (EDD) checklists.
Initiatives will be taken to apply Eco font in printing to reduce use of ink, use scrap paper as
notepads and avoid disposable cups/glasses and to install energy efficient electronic equipment’s
and automatic shutdown of computers, fans, lights, Air Coolers, etc. that will help the Bank to
reduce electricity consumption. Occupancy Sensors may be used in places, i.e. meeting room,
dining room, guest room, etc., not requiring consistent lighting. Energy saving bulbs will be
39
replaced by normal bulbs in branches/offices of the Bank. An extensive plan will be made to use
solar energy at the Bank premises to save electricity.
Steps will be taken to save energy from corporate business travel and employees will be
encouraged to purchase energy efficient cars (that consume less fuel) to reduce gas and
petroleum consumption. The General Services Division will execute the above activities in
collaboration with the Information Technology Division and other Divisions where necessary.
5.2.5. Introducing Green Finance
Preferences will be given in financing eco-friendly business activities and energy efficient
industries. Investment will be encouraged in building environmental infrastructure such as
renewable energy project, clean water supply project, wastewater treatment plant, solid &
hazardous waste disposal plant, bio gas plant, bio-fertilizer plant etc. Bank’s retail and consumer
loan programs will promote environmental practices among clients. Banks credit marketing
Division and CRM Division will look into this area.
40
services to consumer and to create awareness among the mass people. This part will be executed
by the Public Relations Department of Corporate Affairs Division and the General Banking and
Development Division of the Bank.
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5.3.2. Sector specific environmental policies
Strategies will be formulated to design specific policies for different environmental sensitive
sectors such as Agriculture, Agri-business (Poultry & Dairy), Agro farming, Leather (Tannery),
Fisheries, Textile and Apparels, Renewable Energy, Pulp and Paper, Sugar and distilleries,
Construction and Housing, Engineering and Basic Metal, Chemicals (Fertilizers, Pesticides and
Pharmaceuticals), Rubber and Plastic Industry, Hospital/Clinic, Chemical Trading, Brick
Manufacturing, Ship breaking etc.
This part will be executed by Credit Marketing Division and CRM Division.
5.3.3. Green Strategic Planning
A set of achievable targets and strategies will be determined, and disclosed in the Annual Report
and on the website of the Bank for green financing and in-house environment management.
For in-house environment management, the target areas will cover attaining energy efficiency in
the form of the use of renewable energy, reduction of electricity, gas, and petrol consumption,
reduction of GHG emissions, issuance of e-statements, electronic bill pay, saving papers,
environment friendly office buildings etc. For Green Financing, the target areas will cover
reducing loans for certain environmentally harmful activities, attaining a particular percentage of
environmental loans as percentage of total, introducing eco-friendly financial products etc. This
part will be executed by General Services Division, Information Technology Division, Corporate
Affairs Division, Credit Marketing Division and Credit Risk Management Division (as the case
may be).
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5.3.5. Improved In-house Environment Management
Strategy of reuse, recycling of materials and equipment’s, and source reduction and waste
minimization strategy will be part of in-house environmental management of the Bank. Virtual
meeting will be carried out through video conferencing in lieu of physical travel which would
help saving cost, energy as well as time. This part will be executed by General Services Division
and General Banking and Development Division.
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5.4. Green Product and Standard Report
5.4.1. Phase – III
Activities under Phase – III have to be completed by December 31, 2013. At this phase, the Bank
will introduce Green Products and submit report based on international standard.
5.4.2. Designing and introducing innovative products
Alongside avoiding negative impacts on environment through banking activities, the Bank will
introduce environment friendly innovative green products to address the core environmental
challenges of the country.
5.5.2. Compliance
The compliant banks practicing Green Banking will have the following preferential treatments:
Bangladesh Bank will award points to banks on Management component while
computing
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CAMELS rating where there will ultimately be a positive impact on overall rating of a
bank.
Bangladesh Bank will declare the names of the Top Ten Banks for their overall
performance in green banking activities in the BB websites.
Bangladesh Bank will actively consider green banking activities/practices of a bank
while according permission for opening new bank branch.
In view of the above, all concerned Divisions of the Bank must put their sincere efforts to make
UCB a compliant Bank.
Global warming, which is one of the most burning & discussed issues, has the worst impact on
the climate of the planet as a whole. The rapid change in climate will be too great to be adapted
by the eco-systems, since the change have already made direct impact on biodiversity,
agriculture, forestry, dry land, water resources and human health. As such, issue of global
warming calls for a global response. Due to unusual weather pattern, rising greenhouse gas,
declining air quality etc. society demands that business also take responsibility in safeguarding
the planet. The key areas of environmental degradation cover air pollution, water pollution,
surface water scarcity, encroachment of rivers, improper disposal of industrial, medical and
house-hold waste, deforestation, loss of open space, loss of biodiversity and many other issues.
In addition, Bangladesh is one of the most vulnerable countries of the world due to climate
change. In line with global development and response to the environmental degradation,
financial sector in Bangladesh in part has already started playing their roles as one of the key
stake holders to address the issue properly. The climate of Bangladesh has already been exposed
to global warming due to environmental pollution followed by climate degradation although she
can’t be accused to be responsible for these issues. However, the climate of the country is rapidly
deteriorating due to recklessness of her citizens and inefficient & ineffective use of natural/semi-
natural/manufactured/processed/ transformed resources. Natural disasters like cyclone, flood,
draught and earthquake become very frequent. As such, state of environment in Bangladesh
needs proper attention and up gradation for ensuring a better future for our successors.
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5.6.1. Objectives of the policy
The main objective of the policy will be to contribute to the national/global interest through
establishing an environment friendly banking business system which may be achieved through
proper utilization of human & physical resources and encouraging channeling of fund to
projects/businesses those expose no or very little risk to the environment/climate.
46
environmental degradation are considered and costs are measured, then economic benefits which
these protection measures fetch would have been huge. As formulating & adopting Green
Banking policy will be ultimately befitting for the climate/environment, formulation of effective
policy through designing effective strategy needs to be addressed quickly & properly. Promises
of potential cost savings from no cost or low-cost resource efficiency or waste prevention
measures need to be clearly demonstrated before they will be more widely adopted. This is the
high time for the bank to formulate this policy for confirming its stance towards safety of
environment.
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Financing in eco friendly and environmentally sustainable business activities and energy
efficient industries shall be extended through preference by all the credit delivery points.
Environmental infrastructures such as renewable energy project(s), clean water supply project(s),
waste water treatment plant(s), solid and hazardous waste disposal plant(s),bio-gas plant(s), bio-
fertilizer plant(s) are encouraged those will be financed by the bank. Viability of environmental
infrastructures for financing shall be assessed in line with the environmental issues i.e. how the
purpose of the project(s)/ business & to what extent this/these is/are rewarding to the
environment. Most viable project(s)/business/ sector(s) shall be prioritized for financing to
position the bank gradually as a “Carbon Neutral Bank” first & then as a “Climate Positive
Bank”.
5.6.5. Creation of Climate Risk Fund
The bank addresses environmental issues & assesses environmental risks (high/ moderate/low)
of projects/businesses of different sectors in different areas those are financed by the bank and
create climate risk fund. A comprehensive risk exposure matrix shall be developed for assessing
environmental risks and reported to different credit committees of the bank by the branches in
the risk exposure matrix. The fund to be allocated/created for “Green Banking” may be used as a
part of CSR activities at the time of emergency.
48
process of commencing e-banking related to processing of proposals avoiding the use of physical
resources like paper, printer cartridge etc. with the help of ICT & MIS Division of the bank.
MIS Division is responsible for preparing effective communication strategy while ICT Division
provides software support & necessary training to the employees of the bank in a manner that all
of employees are trained in “Online Banking practices”.
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Leather (Tannery)
Fisheries
Textile & Apparels
Renewable Energy
Pulp & Paper
Sugar & Distilleries
Construction & Housing
Light Engineering & Basic metal
Chemicals (Fertilizers, Pesticides & Pharmaceuticals)
Rubber & Plastic Industry
Hospital/Clinic
Chemical Trading
Brick Manufacturing
Ship Breaking etc.
5.6.11. Pricing Strategy
The bank shall formulate its pricing strategy for its products inline with the global green banking
issues. The clients complying green policy of the bank and adopting appropriate technology for
addressing ERM issues from their part shall be eligible for receiving facilities at a reduced rate
than the usual rate of the bank. Premium pricing strategy shall be adopted and practices for the
clients to reduce carbon/heat emission, waste materials, energy utilization, hazardous by-
products and increase productivity, efficient use of materials, preservation of natural water
stream & water resources.
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5.6.13. Setting up Green Branches
The bank shall set up Green Branches which will be featured by the provision of using natural
light, renewable energy and surface & recycled water to the highest possible extent and
implementing energy efficient lighting & cross ventilation air movement system and replacing
gradually the less energy efficient machinery/equipment’s by higher energy efficient
machinery/equipment’s. The branches shall be decorated in such a manner that will promote the
activities of “Environmental”/”Green Banking” issues to the people.
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The bank shall introduce environment friendly innovative green products addressing the core
national/global environmental challenges. Research & Development (R&D) Division of the bank
shall formulate plan for developing & marketing Green Banking products to offer for public.
Global warming also called as “Green House Effect” is a global issue that calls for a global
response. The warming is the effect of certain man-made gas emissions such as carbon-dioxide,
methane, nitrous oxide and hydro-flour carbon is found responsible for distortion of balance in
the environment and climate changes. The rapid change in climate will probably be too great to
52
allow many eco systems to suitable adapt, since the changes have direct impact on bio diversity,
agriculture, forestry, dry land, water resources and human health. However, there is general lack
of adequate awareness on the above issues and hence there is urgent need to promote certain
urgent measures for sustainable development and corporate social responsibility. Green Banking
is a component of the global initiative by a group of stakeholders to save environment.
Bangladesh is one of the most climate change vulnerable countries. In line with global
development and response to the environmental degradation, financial sector in Bangladesh
should play an important role as one of the key stakeholders. Bangladesh Bank’s Initiatives:
Bangladesh Bank is well aware of the environmental degradation situation as mentioned and has
already given time to time directions to all schedule banks. Commercial banks are now required
to ensure necessary measures to protect environmental pollution while financing a new project or
providing working capital to the existing enterprises.
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increased the carbon footprint of banks due to their massive use of energy e.g. lighting, air
conditioning, electronic / electrical equipment’s, IT, high paper wastage, lack of green buildings
etc. Therefore, to adopting green banking, bank should adopt technology, process, and products
which result in substantial reduction of their carbon footprint as well as develop sustainable
business.
54
bank’s reputation can be damaged if there is a failure of the business due to environmental
reasons.
55
Paperless banking through using modern computer software, effective e-mail service for
official correspondence. Dhaka Bank has already been using a robust core banking
software and e-mail for intra bank official correspondence and with the other
organization those have same connectivity.
Dhaka Bank also has taken initiative for use of energy savings light and rational use of air
conditioner in its all offices for reducing electricity consumption.
Dhaka Bank is also thinking to install solar panel in their rural branches as a source of
electricity.
Dhaka bank also thinking to take coverage of Green Travel Insurance for the carbon
emission caused by it.
A separate dedicated team of Green Banking Cell has been formed consisting of 06 (six)
officials from related divisions led by Head of Credit Division who may contribute with
the vested responsibilities in line with the principles towards implementation and
reporting of Green Banking initiatives of the Bank. All the Divisions, Branches and
senior level management have been informed on the principles and responsibilities on
their part. The team is actively working covering the respective areas for compliance.
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The Management has allocated fund for an amount of Tk.5.00 million in support of
marketing and capacity building of the Bank for green banking activity.
A Green Office Guide covering set of general instructions have been circulated among
the Divisions and Branches for meticulous compliance of the instructions contained and
directed towards efficient use of resources, technologies and energy as well as reduction
of wastages.
A separate fund for an amount of Tk.5.00 million has been approved for creation of a
Climate Change Risk Fund which to be disbursed in the environmentally vulnerable areas
in case of emergency as a part of Bank's CSR expenses.
DBBL has the largest on-line banking network and extensively using its on-line facilities
which has meantime received an extreme recognition in the country. It has brought user-
friendly state-of-threat technologies for the masses, offering variety of product supports
at a minimum costs and fostering fastest customer services through its professional
expertise. It has reduced cost burden, ensured speedy transactions, one point banking
support and familiarizing clients with Internet supporting activities. The entire network
system is in process of further up gradation for better uses of resources and support for its
clients. The practice of electronic mail for internal communications have been
introduced. Number of users of Internet banking facilities have been gradually increasing.
The Bank is under process of introduction of Green Banking Products for its customers
engaged in the field of environment-friendly projects and initiatives.
To educate its officials on the issues, Bank has arranged programs to be held shortly with
the participation of executives and officers from divisions and branches ensuring
participation of resource personnel from Bangladesh Bank on the issue.
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Bank is offering financial supports in the field of eco-friendly business initiatives since
long and a considerable amount of finances have been extended towards establishment of
ETP, Solar
Home Systems, agrifinances as well as it is channelizing fund at grass root levels through
NOG/MFI linkages and also through its own business network in the areas of eco-
supporting projects.
Meantime, 5 branches of DBBL have been partially powered with SHS as alternative
sources of energy. At corporate level, DBBL has a network with valuable exporters of the
country and adequate finances have been extended especially in the garments and textile
industries supported with ETP.
Notable, DBBL participated in the world's first Compost Plant Commissioned under a
CDM project namely WWR Bio Fertilizer Bangladesh Ltd. by way of injecting fund for
Tk.40.00 million which has formally released its first high quality organic fertilizer
produced mainly from fruits and vegetables waste collected from markets in 2009. This
was a unique investment and has received an outstanding recognition in the country.
Bank has already incorporated Environmental Risk in its credit risk methodology and
related circulars among the employees have already been released for compliances.
Approvals are selectively provided to the clients ensuring capacity to prevent potential
environmental risks.
Bank allows facilities to the client on the condition that supporting environmental conditions and
permission from the related environmental regulatory agencies have to be obtained for availing
the facilities. Regular monitoring on environmental issues of the existing clients are advised to
the credit personnel’s to maintain. The Bank always encourages business entities actively
working in eco-friendly business activities and energy efficient industries. Credit officers at
marketing levels are directed to search potential clients engaged in eco-supporting business
projects. A number of eligible credit proposals are under consideration. In line with the core
objectives of Bangladesh Bank, the Government and World forum towards a better earth and
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careful practices for safeguarding this beautiful planet for the future generations, DBBL always
remains and will actively work with the people at best as it can.
59
deteriorating this beautiful planet. Bangladesh is considered as the most victim state for climatic
changes. It is vulnerable for frequent flood, tropical cyclones, storm surges and droughts. These
damage assets suffer people, lives and hinder progress and economic stability. A baseline study
of Bangladesh Bank underlines that Banks/FIs in the country cannot avoid themselves in
protecting environmental degradation by way of reshaping their financing patterns and internal
practices to minimize wastages and use of resources. The financial and economic development of
Bangladesh is inseparably tagged with gradual environmental degradation. An institutionalized
awareness to address adverse environmental issues and their consequences have compelled the
Banks/FIs to integrate Environmental Risk Management principles.
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5.8.5. Bangladesh Bank Directives
Banking Regulations & Policy Department, Bangladesh Bank vides their Circular No.02 dated
February 27, 2011 has outlined detail policy guidelines for implementing Green Banking through
all scheduled banks operating in Bangladesh. The Circular addressed to adopt banks a
comprehensive Green Banking Policy in a formal and structured manner in line with global
norms so as to protect environmental degradation and ensure sustainable banking practices. It is
hereby stated that, Green Banks or environmentally responsible banks do not only improve their
own standards but also affect socially responsible behavior of other businesses.
The policy advised to cover in 3 segregated phases. At the first Phase, the directives urged to
develop a:
Green Banking Policy of the Bank showing general commitments though in-house
operations.
It was advised to form a High Powered Committee with the participation of directors
from the Board of the Bank to review policy outcomes.
Accordingly, a separate Green Banking Cell consisting of personnel’s of divisions have
been advised to form for designing, evaluating and administering related green banking
policy issues.
The directions of Bangladesh Bank also insisted to allocate considerable amount of
budget for Green Banking.
It is instructed to circulate a Green Office Guide among the employees addressing to the
issues like efficient use of energy, resources and uses of eco-friendly technologies.
The guidelines supported to create Climate Risk Fund to finance as a part of Bank's CSR
expenses in the environmentally vulnerable areas in case of emergency.
The directives advice to ensure optimum use of On-line banking facilities to save paper,
time, resources and associated costs ensuring fastest customer services.
Side by side, supporting employee training and consumer awareness program have to be
developed by the Bank for an effective launching of the principles.
The policy advises to disclose the activity in the respective Website for awaking people
on the initiatives.
61
The directives given importance on Green Marketing of the products presumed to be
environmentally safe as well as introduction of Green Finance for eco friendly business
activity and energy efficient industries.
One of the most valuable inputs in the policy as directed was the incorporation of
Environmental Risks in Credit Risk Management.
The Second Phase stating a time frame up to December 31, 2012 for implementation as
directed includes: Application of Sector Specific Environmental policies and Green
Strategic Planning to determine a set of achievable targets and strategies.
At the same time it advises to set up Green Branch with a special logo featuring
maximum uses of natural light, use of renewable energy, use of energy saving
equipment’s, reduced use of water and electricity.
The directives guided to set improved In-House Environment Management setting
strategy of reuse, recycling materials and waste minimization strategy.
It was also directed to formulate Bank specific Environmental Risk Management Plan
and Guidelines.
Rigorous programs to educate clients and disclosure and reporting of Green Banking
activities are also to be performed by the Bank, as directed.
In the Third Phase advising to implement within December 31, 2013 addresses to: Design
and introduce environment friendly Innovative Green Products.
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Chapter 6
63
Recommendation
6. Recommendation
Bank should keep following aspects in mind while financing any projects:
1. Analyzing the project in terms of scale, nature and the magnitude of environmental impact.
The project should be evaluated on the basis of potential negative and positive
environmental effects and then compared with the ‘without project situation’. There should be an
Environmental Impact Assessment (EIA) of each project recommending the measures needed to
prevent, minimize and mitigate the environmental negative impact before financing the projects.
2. While investing or funding the projects, the financial institutions should assess the sensitive
issues like vulnerable groups; involuntary displacement etc. and projects sh oul d be
ev al ua t e d i n t e rm s of en vi ron m e nt al l y i m po rt an t a r e as i n cl udi n g wetlands, forests,
grasslands and other natural habitats.
3. Banking institutions need to evaluate the value of real property and the potential environmental
liability associated with the real property. Therefore, the banks sho ul d h av e r i gh t
t o i ns p ec t t h e p rop e rt y o r t o h av e a n e nvi ro nm ent al au di t performed through the
life of the loan.
64
5. The next round of evaluation includes loan structuring, credit approval, and credit
r evi e w a nd l o an m an a gem e nt . F ur t h e r ba nk s h av e ann u al au di t s , q ua rt e rl y
environmental compliance certificate from the independent third party and also from the
government
Further the banks can introduce green bank loans and products like:
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Chapter 7
66
Conclusion
7. Conclusion
Th er e i s a gr owi n g aw a r en es s am o n g b an ks a nd fi n an ci al i ns t i t u t i o ns t o
pr ot ec t t h e environment and thereby save 'mother planet'. Big banks are committing large
funds on sustainable basis in responsible banking, creating more values for our next generation. They are
shifting forward from 'profit' to 'people' and now more importantly, to create a better future for
all. The sooner this philosophy of 'green banking' is embraced, the better it is for all. A good online
banking system is the linchpin of reduced costs, improved performance and competitiveness. We provide the
service at no cost to our retail and business customers. The logical progression of online banking - converting
existing customers to online bill payment- is a harder step and can require a lot of legwork. Once
customers get here, there is the chance of moving to completely electronic banking. Environmental
conservation and protection of ecological balance should be maintained through
combined efforts of multi stakeholders. The main stakeholders are businessmen, consumers and
professionals, NGOs and government organizations. As green initiatives sweep across the globe,
more and more banks have been adopting green banking practices. Today, many
banks are assessing environmental risk while selecting a project for financing. Even
as the market slows in the face of econ omic upheaval, many banks are keeping a focus on green.
The positive outcomes of these green initiatives are evident in many instances. However, these
are the results of collective efforts. There is no doubt that the progress so far has been made
possible because of the substantial efforts of all stakeholders, covering banks, policymakers, civil
society organizations, international development and financial institutions, business entities and
the common people.
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References
http://www.bangladesh-bank.org
Bangladesh Bank (2012), Green Banking Report, Green Banking and CSR Department.
Green Banking Policy of Jamuna bank limited Bangladesh, Head Office, and Dhaka.
Bangladesh Bank (2011), Policy Guidelines for Green Banking.
Bangladesh Bank Green Banking policy, viewed: July 21, 2012.
Atiur Rahman, “Financial Services at People’s Doorstep”, Governor, Bangladesh Bank, 2010.
http://dhakabankltd.com
www.basicbanklimited.com
www.ucb.com.bd
www.dutchbanglabank.com
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