Green Banking In Banks and Financial Institutions

Green Banking Means paperless and economic banking strategy which reduces cost in many ways of banks and other financial institutions. As a result of global warming and abnormal climate change, many ¬†other countries in the world, is at grave risk. In recent times, the “Save the Environment Movement” has gained momentum around the world. An important aspect of this movement is the implementation of green banking and eco-friendly banking activities. In order to prevent environmental disasters and save the world, the Government of some countries has taken various programs with the highest priority.

Many financial institutions and commercial banks has already embarked on an environmentally friendly banking program with a strong sense of social responsibility and implementation of government programs. Central banks of many countries have formulated a comprehensive eco-friendly banking policy in line with world standards in the interest of a strong and sustainable banking system. Following are the details of the program adopted by banks and other financial institution to implement green banking activities as per the guidelines of the prescribed policy.

Green dot Banking Scope

Formulation of Green Banking Policies:

The main objective of Green Banking Policies is to build environment friendly and sustainable banking system. A “Green Banking Policy” has already been formulated outlining the objectives and key points of eco-friendly banking or green banking in order to protect the environment through financing and overall operations to ensure that no activities of the bank directly or indirectly cause environmental disasters. In view of the need to amend the existing “Green Banking Policy” in keeping with the changed business situation, it has been formulated by amending / enlarging / subtracting and sent to all the offices / branches of the Bank.

Preparation of ‘Green Office Guide: In order to implement the green banking activities many institutions follow a guideline has been issued with guidelines / necessary general guidelines on In-house Environmental Management to reduce paper usage, moderate water use, electricity at all office and branch levels of the bank. And the most importance has been given to fuel economy.

Development of Internal Environmental Management: In order to ensure environment friendly or affordable banking through Reduce, Reuse and Recycle practices in the use of various materials in the internal environmental management of the bank. In the field of green banking Solar panels with various capacities were installed in banks and other financial instutions.

Inclusion of environmental risks in debt risk management: Risks of environment and climate change have been included in Credit Risk Management (CRM). The loan risk of the project is being assessed as well as the environmental risk is being assessed in the case of new loan approval and renewal.

The Environmental Risk Rating (EnvRR) of the financed and financed projects of the bank is being assessed as per the Environmental Due-diligence (EDD) Checklist included in the Guidelines On Environmental Risk Management (ERM) prepared by Bangladesh Bank for Assessing Environmental Risks.

Launch of Green Financing: Financing of Industrial Project Effluent Treatment Plant (ETP), Establishment environment friendly Brick Field to Prevent Carbon Emissions, Establishment of Solar Power Project, Expansion of Renewable Energy Project, Bio-Fertilizer Plant, Bio-Gas Plant, PET Green financing is being done through financing in Non-fire Block Brick Manufacturing Plant, Vermicompost etc.

Introducing Green Marketing: Initiatives have been taken to innovate, manufacture, market and market environmentally friendly products and services. Ensuring the production, marketing and marketing of environmentally safe and risk-free products in bank-financed and financing projects (industry / business).

Formation of Climate Risk Fund: Low interest financing has been provided for the areas affected by various natural calamities including floods, droughts, cyclones, waterlogging, salinity, river erosion. In addition, the Climate Change Risk Fund has been set up as part of corporate social responsibility (CSR) under eco-friendly banking for various areas prone to risks due to the environment and climate change, and the money is being used for the development of natural disaster areas.

Green Banking Financial Products

Green financial assists with making powerful and broad market-based answers for address a scope of ecological issues, including environmental change, deforestation, air quality issues and biodiversity misfortune, while simultaneously recognizing and making sure about those advantage clients. Some of Green banking monetary items incorporates: Green home loans, web based banking, far off store catch, green vehicle advances and green Visas.

Introduction of Online Banking: Online Banking facility is being provided to the customers through Core Banking Solution (CBS) and SMS Banking. Online banking, otherwise called web banking, e-banking or virtual banking, is an electronic installment framework that empowers clients of a bank or other monetary establishment to lead a scope of monetary exchanges through the monetary foundation’s site.

Green Credit Cards: A green VISA/Mastercard permits cardholders to procure rewards or focuses which can be recovered for commitments to eco-accommodating magnanimous associations. These cards offer a great motivator for buyers to utilize their green card for their costly buys.

Establishment of Bank’s Own ATM: Customers are being provided 24 hours service through Automated Teller Machine (ATM) by issuing debit and credit cards.

Remote store catch (RSC) is a framework that permits a client to filter checks distantly and send the checks pictures to a bank for store, typically by means of a scrambled Internet association. At the point when the bank gets a check picture from the client, it presents the store for the client and makes the assets accessible dependent on the client’s specific accessibility plan. Banks normally offer Remote Deposit Capture to business clients as opposed to people.

Many green vehicle credits support the acquisition of vehicles for underneath market financing costs, which exhibit higher eco-friendliness.

Green home loans otherwise called Energy Efficient Mortgages (EEM’S), furnish retail clients with extensively low financing costs look at market rates for customers who buy new energy effective homes or put resources into retrofits, energy productive apparatuses or green force. Banks can likewise decide to give green home loans by taking care of the expense of changing a house from customary to green force, just as incorporate this client advantage when advertising the item. This is called Green Mortgages.

Formulation of Environmental Policies Based on Specific Sectors

Formulation of Environmental Policies based on specific sectors. , Metals and engineering industry, sugar and sugar by-products, rubber and plastics industry, construction and housing industry, chemical industry (fertilizers, pesticides and pharmaceuticals), Hospitals / Clinics.

Effective measures have been taken to implement specific sector based environmental policies for Diagnostic Center, Brick Manufacturing, Shipbreaking Industry, Jute and Jute Products Manufacturing Industry etc.

Preparation of Green Strategic Planning: Green Strategic Planning has been formulated and implemented at all levels of the Bank with the aim of informing through e-mail.

All concerned are being encouraged to use the resources of bankers, customers and businesses in accordance with the Environmental Law and to motivate them to get involved in environmental protection. Training / workshops on green banking are being conducted in the staff colleges and training institutes of the banks.

In order to save time and money and to introduce paperless banking, steps have been taken to issue all the correspondence through circular issuance through the bank’s website and e-mail. Information on Green Banking activities would be reported to respective authority on a definite time basis in prescribed format. Recently, a separate “Sustainable Finance Unit” has been set up under the Risk Management Division by abolishing the existing CSR cell and Green Banking Unit of the some Banks as per the instructions of monitoring and controlling authority.

Green Banking Services

Banks are growing new items and administrations that react to clients interest for reasonable decisions. Following are a portion of the choices that banks should offer to their clients:

  1. Electronic and portable banking encourages clients to perform the majority of their bank needs whenever, anyplace.
  2. Automatic installments lower the need to compose and send checks via mail.
  3. Paperless proclamations, item data aides and yearly reports to clients and partners.
  4. Credit and Debit cards can be utilized while making the installment of different costs without carrying/conveying physical cash.
  5. Mobile banking is utilized for performing balance checks, account exchanges, installments, credit apparatuses and so on, by means of cell phone or Personal Digital Assistant.

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