Green Banking Practice in Bangladesh A case study on Shahjalal Islami Bank Ltd, Mirpur Branch, Dhaka
Date of Submission: July 28, 2012
Page 1
Green Banking Practice in Bangladesh A case study on Shahjalal Islami Bank Ltd, Mirpur Branch, Dhaka
Submitted To Sabrina Akhter Lecturer Department of Real Estate Faculty of Business& Economics
Daffodil International University
Submitted By Summia Parvin ID NO. 083-11-567 Bachelor of Business Administration (BBA) Faculty of Business& Economics
Daffodil International University
Date of Submission: July 28, 2012
Page 2
Letter of Transmittal
July 28, 2012
Sabrina Akhter Lecturer Department of Real Estate Faculty of Business& Economics Daffodil International University
Subject: Submission of the internship report on Green Banking Practice in Bangladesh: A case study on Shahjalal Islami bank Ltd.
Dear Sir / Madam It is my great pleasure to submit my internship report on “Green Banking Practice in Bang Bangla lade desh sh:: A case case study study on Shah Shahjal jalal al Islam Islamii bank bank Ltd. Ltd.”. ”. I have have comp complet leted ed my internship during the period from March to May, 2012. The entire report is based on my practical experience in the Shahjalal Islami bank Ltd.”. I have put my best effort in completing the report with all the information that I have collected during my stay at the Shahjalal Islami bank Ltd.”. I have a great hope that the report will meet your expectation and aid you in getting a clearer idea about the subject. Sincerest gratitude for your illuminating guidance.
Sincerely yours ………………….. Summia Parvin ID. No. 083-11-567 Bachelor of Business Administration Faculty of Business& Economics Daffodil International University
Page 3
Letter of Authorization Authorization I, Summia Parvin, ID: 083-11-567, a student of BBA program, Department of Business Administrati Administration, on, Faculty Faculty of Business Business and Economics, Economics, Daffodil Daffodil Internationa Internationall University University,, hereby declared that the presented internship report on “Green Banking Practice Practice in Bangladesh: A case study on Shahjalal Islami bank Ltd.” is prepared by me after
successfully completion of an internship program. I hereby solemnly declare that the work presented in this report has been carried by me and has not been previously submitted to any university for an academic qualification or degress. The work I have presented does not breach any copyright. I further further undertake undertake to indemnify indemnify the university university against any loss or damage arising from breach of the foregoing obligation.
…………………………. Summia parvin Program: BBA Batch:21st Major in finance Daffodil International University
Page 4
Letter of Approval This is to certify that, Summia Parvin, ID No# 083-11-567, program: B.B.A , batch:21 st Major in finance is a regular student of Department of Business Administration, Faculty of Busine Business ss and Econo Economic mics, s, Daffodi Daffodill Intern Internati ationa onall Univer University sity,, she has successf successfull ully y completed her internship program In Mirpur branch of Shahjalal Islami Bank Limited, Dhaka and has prepared this Internship report under my direct supervision. Her assign “Green Bankin Banking g Practi Practice ce in Bangla Banglades desh: h: A case case study study on intern internship ship topic topic is “Green Shahjalal Islami bank Limited. I think that the report is a worthy of fulfilling the
partial requirement of B.B.A.program. . I wish her happiness and every success in life.
…………………………. MS. Sabrina Akhter Lecturer Department of Business Administration Faculty of Business& Economics Daffodil International University
Page 5
Acknowledgement
Firstly I would like to convey my gratefulness to the Almighty for giving me the ability and patience to work hard successfully. I am also grateful to my honorable teachers who encouraged me to reach the goal.
I am not have been successful in complete the report without the active support and cooperation from many persons in the Shahjalal Islami bank Ltd.
I have tried my best and also worked hard for preparing this report. I have received whole-hearted cooperation from my Internship supervisor Amir Hossain Sorkar manager of Shahjalal Islami bank Ltd. of Mirpur Branch who advice me and also guided me.
I also want to express my strong gratitude to my honorable teacher and my internship supervisor supervisor Sabrina Sabrina Akhter Akhter for his enthusiastic enthusiastic cooperation cooperation and supervision supervision during during the preparation of the report. I am grateful to him for his suggestions and all instance observations to prepare the report.
I would also like to thank to the officials of Shahjalal Islami bank Ltd. Mirpur Branch especially especially Mokammel hossain, hossain, Deputy Deputy Manager, Jun E Alam Senior Senior officer officer and a very special thanks goes to Amer Hossain Sorker manager of Shahjalal Islami bank Ltd. of Mirpur Branch for providing all the support in the organization. Special thanks go to the respondents, who spared their time generously, and took the trouble of answering my queries and helped me to complete my study.
Page 6
Executive Summary
Green banking, also known as a social, an ethical bank, alternative, civic, or sustainable bank, is a bank concerned with the social and environmental impacts of its investments and loans. Ethical banks are part of a larger societal movement toward more more social and environmen environmental tal responsibility responsibility in the financial financial sector. This movement movement includes: includes: ethical ethical investment, socially responsible investment, corporate social responsibility, and is also related to such movements as the fair trade movement ethical consumerism, boycotting, etc. Ethical banking is a juvenile sector within this movement. Other areas, such as fair trade, have comprehensive codes and regulations to which all industries that wish to be certifie certified d as fair trade trade must adhere. adhere. Ethical Ethical banking banking has not develo developed ped to this this point; point; because of this it is difficult to create a concrete definition distinguishing exactly what it is that sets an ethical bank apart from conventional banks. Ethical banks are regulated by the same authorities as traditional banks and have to abide by the same rules. In this report at first I tried to summarize an overview of SJIBL. Then I tried to define definition of green Banking, history and background of green banking. In the middle of our report, I motivated by our study to describe about the importance, major areas, products of green banking. Then I give various initiatives taken by internationally, nationally to implement green banking. Then we tried to describe the green banking policy of SJIBL. I also give some findings of report. In conclusion I describe the advantages of SJIBL to use Green Banking as an instrument to reach the 16 core people of Bangladesh. Because one of the major economic agents influencing overall industrial activity and economic growth is the financial institutions such as banking sector. Since banking sector is one of the major stake holders holders in the Industrial Industrial sector, it can find itself faced with credit risk and liability risks. Further, environmental impact might affect the quality of assets and also rate of return of banks in the long-run. Thus the banks should go green and play a pro-active role to take environmental and ecological aspects as part of their lending principle, which would force industries to go for mandated investment for environmental management, use of approp appropria riate te technol technologi ogies es and managem management ent system systems. s. This This paper paper explor explores es the importance of Green Banking, sites international experiences and highlights important lessons for sustainable banking and development in Bangladesh. Finally this paper tries to draw picture how Sustainable development can best be achieved by allowing markets to work within an appropriate framework of cost efficient regulations and economic instruments.
Page 7
1.1 Introduction Defore Deforestat station ion,, dissert dissertatio ation, n, flood, flood, soil soil erosio erosion, n, siltati siltation, on, sedime sedimenta ntation tion,, river river bank bank erosion, increased evaporation, Co2 emissions, rising sea-level, displacement, cyclones, Stalinization, arsenic contamination are most burning word in the present world. And all words are related natural disaster and climate change. Because, climate change is the most complicated issue the world is facing. Across the globe there have been continuous endeavors to measure and mitigate the risk of climate change caused by human activity. Anothe Anotherr name name of this this attempt attempt is “Sustai “Sustainab nable le Develo Developme pment” nt” to us. The process process of sustain sustainabl ablee develo developme pment nt involv involves es all sectors sectors in the econom economy y – Govern Governmen ment, t, NGOs, NGOs, corp corpor orat ate, e, citize citizens ns and, and, of cour course, se, the the finan financi cial al sect sector or.. Our Our belo belove ved d moth mother er land land Bangla Banglades desh h is one most affecte affected d country country by this this climat climatee change change.. And And Bangla Bangladesh desh banking industry is ahead one step from other financial institutions for taking endeavors to measure and mitigate the risk of climate change caused by human and banking activity. This activity is familiar in banking industry with title of “Green Banking”.
Page 8
1.2 Origin of the Report Management of any business of any business activity requires so much expertise from the part of its employees. To keep pace with the new trend financial institutions & other organization need executive with modern knowledge. The knowledge should have some practical experience also. To fulfill this requirement most of the departments has been introduced a three month internship program as an indispensable part of BBA program. The author authority ity of Daffod Daffodil il Intern Internatio ational nal Univer University sity author authorize izess me to do a practi practical cal orientation at Shahjalal Islami Bank Ltd.
Page 9
1.3 Scope of the Report Scope means area of operations or field of the study. The scope of this report was extend extended ed to the Green Green Bankin Banking g activi activitie tiess of Bangla Banglades desh h and Shahja Shahjalal lal Islami Islami Bank Bank Limited.
Page 10
1.4 Objective of the Report The objectives of the study are as follows: •
To know the basic concept and objectives of green banking.
•
To find out and evaluate the services and performance of green banking practice in Bangladesh
•
To identify the green baking services of SJIBL
•
To evaluate the performance of green banking practice in SJIBL
•
To iden identi tify fy the the prob problem lemss of green green bank bankin ing g prac practi tice ce and and recom recomme mend nd some some suggestions for overcoming the problems.
Page 11
1.5 Methodology of the Report. This is an exploratory type of research. Information collected to furnish this report is both from primary and secondary sources. The overall process of methodology has been given below: Primary Sources of Data: Officers of Shahjalal Islami bank Ltd •
Secondary Sources of Data: Annual report of Shahjalal Islami bank Ltd. • Website of Shahjalal Islami bank Ltd. •
Method of data collection: •
Face to face interview method
•
Officers of Shahjalal Islami bank Ltd
Target population:
Sample Size: •
Four officers and twenty six foreign exchange clients select to take interview.
Sampling Technique: Convenience sampling
Page 12
1.6 Limitations of the Report
The respondent may be uninterested to answer the questions.
Time will be a major constraint in accumulating all sorts of information in an organized way.
Confidentiality of data will be another key barrier that will be faced during the conduct of this study. As every organization has their own secrecy that is not revealed to others, so acquiring the absolute raw information will be a difficult and almost impossible task for me.
Large-scale research will not be possible due to constraints and restrictions of both time period and by the organization organization as well.
Green Banking Technology is newly come to our country, so, there is no accurate information available.
The information information sources regarding this study are not so much large. It would would be more correct if the study conduct with large information sources.
Page 13
Background of the organization
(SJIBL)) commen commenced ced its commer commercial cial operati operation on in Shahjalal Shahjalal Islami Islami Bank Limited (SJIBL accordance with principle of Islamic Shariah on the 10th May 2001 under the Bank Companies Act, 1991. During last eight years SJIBL has diversified its service coverage by opening new branches at different strategically strategicall y important locations across the country offeri offering ng variou variouss service service produc products ts both both investm investment ent & deposi deposit. t. Islamic Islamic Bankin Banking, g, in essence, is not only INTEREST-FREE banking business, it carries deal wise business product thereby generating real income and thus boosting GDP GDP of the economy. Board of Directors enjoys high credential in the business arena of the country, Management Team is stron strong g and and supp suppor orti tive ve equi equipp pped ed with with excel excelle lent nt prof profess essio iona nall know knowled ledge ge unde under r leadership of a veteran Banker Mr. Muhammad Ali. Name of the Company Shahjalal Islami Bank Limited Legal Form A public limited company incorporated in Bangladesh on 1st April 2001 under the companies Act 1994 and listed in Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited. Commencement of Business 10th May 2001.
2.1 SJIBL’s Vision To be the the uniq unique ue mode modern rn Isla Islami mi Bank Bank in Bang Bangla lade desh sh and and to make make sign signif ific ican antt contribution to the national economy and enhance customers' trust & wealth, quality investment, employees' value and rapid growth in shareholders' equity.
2.2 SJIBL’s Mission •
To provide quality services to customers.
•
To set high standards of integrity.
•
To make quality investment.
•
To ensure sustainable growth in business.
•
To ensure maximization of Shareholders' wealth.
Page 14
•
To extend our customers innovative services acquiring state-of-the-art technology blended with Islamic principles.
•
To ensure human resource development to meet the challenges of the time.
2.3 SJIBL’s Strategies •
To strive for customers best satisfaction & earn their confidence.
•
To manage & operate the Bank in the most effective manner.
•
To identify customer’s customer’s needs & monitor monitor their perception perception towards meeting those requirements.
•
To train & develop all employees & provide them adequate resources so that the customer’s needs are reasonably addressed.
•
To promote organizational efficiency by communicating company plans, polices & procedures openly to the employees in a timely fashion.
•
To cultivate a congenial working environment.
•
To diversify portfolio both the retail & wholesale markets.
2.4 SJIBL’s Motto •
Committed to Cordial Service.
2.5 Shariah Council Shariah Council of the Bank is playing a vital role in guiding and supervising the implementation and compliance of Islamic Shariah principles in all activities of the Bank since its very inception. The Council, which enjoys a high status in the structure of the
Page 15
Bank, Bank, consist consistss of promin prominent ent ulema, ulema, repute reputed d banker banker,, renown renowned ed lawyer lawyer and eminen eminentt economist.
Member Memberss of the Sharia Shariah h Counci Councill meet meet frequen frequently tly and delibe deliberate rate on differ different ent issues issues confro confronti nting ng the Bank Bank on Shariah Shariah matter matters. s. They They also conduc conductt Shariah Shariah inspec inspectio tion n of branches regularly so as to ensure that the Shariah principles are implemented and complied with meticulously by the branches of the Bank.
2.6 SJIBL’s Deposit Schemes •
Mudaraba Monthly Income
•
Mudaraba Double Money
•
Mudaraba Monthly Deposit
•
Mudaraba Millionaire
•
Mudaraba Haji Deposit
•
Mudaraba Housing Deposit
•
Mudaraba Small Business
•
Mudaraba Cash Waqf Deposit
•
Mudaraba Lakhopoti Deposit
•
Mudaraba Bibaho Deposit
•
Mudaraba Mohor Deposit
•
Mudaraba Shikhkha Deposit
2.7 Account services:
•
Al Wadiah Current Deposits (ACD)
•
Mudaraba Saving Deposits (MSD)
•
Mudaraba Term Deposits (MTD)
•
Mudaraba Short Notice Deposits (MSND) Page 16
3.1 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 main obje object ctiv ivee of gree green n bank bankin ing g is to prot protec ectt envi enviro ronm nmen entt thro throug ugh h purs pursui uing ng Mamun Rashid Rashid,, Ex. Ex. managi managing ng enviro environme nmentnt- friendl friendly y financ financing ing polici policies." es." “Said “Said Mamun 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 should priorities priorities
loaning loaning the
sectors that
promote promote
environmen environmental tal
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 minimization strategies, strategies, the financial financial institutions institutions should should initiate initiate 'green office
guide' guide' to help protect the eco-system. eco-system. Use of online communicati communication on instead of printed documents, installation of energy efficient equipment, use of filtered water in place of bottled water and encouraging usage of energy efficient cars are some of the examples of practicing green business” said Shah Md Ahsan Habib, director (training) of BIBM.
3.2 Evolution of Green Banking Page 17
In March 2009, Congressman Chris Van Hollen in USA introduced a Green Bank Act with the aim of establishing a green bank under the ownership of the US government. Its objective was to offer financial support to efforts to increase efficient energy usage, and reduce carbon emissions and environmental pollution resulting from energy creation.
Bank Technology News has recently given Citigroup the US banking giant, top honors in its its firs firstt rank rankin ing g of 'Ame 'Ameri rica ca's 's Gree Greene nest st Bank Banks’ s’.. The The awar award d high highli ligh ghte ted d the the accomp accomplish lishmen ments ts of Citi's Citi's Sustain Sustainabl ablee Operat Operation ionss and Techno Technolog logy y progra program, m, which which inclu include dess doze dozens ns of init initiat iativ ives es aimed aimed at shrin shrinki king ng envi enviro ronm nmen ental tal foot footpr prin ints ts and and controlling costs. In just just one example example,, Citi Citi updated updated computer computer hardwa hardware re across across the 1,000+ 1,000+ Citiba Citibank nk branches in North America, reducing energy costs by 15 percent a year, while improving the speed with which it services 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. he 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.
3.3 Objectives of Green Banking
The broad objective of the Green banks are avoiding waste and giving priority to
environment and society.
Focusing on environment-friendly initiatives by providing innovative financial and
ensure sustainable development.
.
Using organizational resources with responsibility.
keeping the world livable for a long period of time.
To To
mini minimi mize ze pape paperr work workss as much much as poss possib ible le insi inside de and and outs outsid idee the the bank bank.. achieve cost and time efficiency. Page 18
3.4 Importance of Green Banking
The public concern at the state of the environment has been growing significantly in the last few years, mostly due to apparently unusual weather patterns, rising greenhouse gases, declining air quality etc. Banks hold a unique position in an economic system, and can affect production and businesses through their financing activities.
However, if green banking simply means incurring additional costs by a bank, it might never be accepted as common business practice by the global banking industry. Though, positive relationship between green banking strategy and profitability has not always been the case, there is evidence that socially and environmentally responsible banks can also be financially successful and have growth rates similar to, or even better than, those of their conventional competitors.
Moreover, banks that mainly do business with the depositors' money cannot avoid responsibility to the society. When the common people take care of banks in their bad days, banks must be made responsible to take care of the society as well.
Banks that were once seen only as profit motive institutions have been adjusting to a more demanding market and a more socially conscious society over the last two decades. Enviro Environme nmental ntal concern concern is at the centre centre of the green green bankin banking g strateg strategy. y. An increa increasin sing g number number of global global banks banks around around the world world are going going green green by launch launching ing environmental friendly initiatives and providing innovative green products.
Page 19
In the long run, the trend towards green banking will be largely driven by consumer behavior. Common people and consumers are becoming increasingly aware of the responsible behavior of businesses.
4.1 Draft guideline of Green banking in Bangladesh Bangladesh Bank (BB) has prepared a draft policy guideline for introducing green banking this
year
in
line
with
global
development
and response
to the
environmen environmental tal degradatio degradation. n. The guideline, guideline, posted on the central bank web site, outlines outlines a three-stage three-stage roadmap roadmap for green banking, banking, requesting requesting public public feedback feedback by January 25, 2011. The guideline, in the first phase, suggests all banks to develop green banking policies and establ establish ish separat separatee
green green
bankin banking g cells cells
and incorp incorpora orate te
enviro environme nmenta ntall
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 policies by June 2012 for for different different
environmenta environmentall
sensitive sensitive sectors
such
as
agriculture, agriculture,
poultry, poultry,
dairy, dairy,
farming, tannery, fisheries, textile and apparels, renewable energy, pulp and paper, sugar and distilleries, construction and housing, housing, engineering engineering and basic metal, chemicals, rubber rubber and plastic plastic industry, industry, hospital/clin hospital/clinic, ic, chemical trading, brick manufacturi manufacturing ng and ship breaking. During this period, all banks will also set up green branches to use maximu maximum m
natura naturall
light, light, renew renewabl ablee energy energy,, energy energy saving saving light light bulbs bulbs and and other other
equipments. During the same period, they will have to determine a set of achievable Page 20
targets targets and strategies, strategies, and disclose disclose these in their annual reports and websites. websites. They will have to set up green branches. The banks should increasingly rely on virtual meeting through video conferencing. According According to the draft guideline, guideline, banks in the next one year will adopt adopt a green strategic strategic plan, determining their target for green banking. The draft says a system of environment management should be in place in all banks before they step into the third phase of green banking, to be completed by June June 2013.
In this final stage, banks will focus on fine tuning of their green activities and will look for for more more inno innova vati tive ve prod produc ucts ts and and servi service cess to expa expand nd eco-fr eco-frie iend ndly ly busi busine ness ss and and industries.
Commercial Commercial banks will have to adopt a comprehen comprehensive sive green banking policy by December December 2013 as part of the central bank's 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 policy guideline 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 The first quarterly report has to be submitted by July 15, 2011.Besides avoiding negative impacts on envi enviro ronm nmen entt thro throug ugh h bank bankin ing g activ activit ities ies,, the the bank bankss are expe expect cted ed to intro introdu duce ce environment friendly green products to address the core environmental challenges of the country.
The commer commercial cial banks banks will will now requir requiree taking taking measure measuress to protec protectt enviro environme nmenta ntall pollution while financing a new project or 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. They were also asked to finance in solar energy, biogas, ETP and Hybrid Hoffman Kiln (HHK) in brickfield under BB e -finance scheme.
Page 21
4.2 Green banking in Bangladesh Bangladesh Bank, the central bank, has a greater role in shaping up a concrete guideline for green banking banking practices practices in Bangladesh. Bangladesh. According According to central bank, bank, each bank and financial institution can formulate a strategy and guideline for Green Banking and Green Financing.
The commercial commercial banks banks are to develop develop green banking banking policies policies and show general general commitment commitment on environ environment ment throu through gh
in-house in-house perform performances ances by Decemb December er 31 this
year. year. A high high-po -powe were red d comm committ ittee ee will will be resp respon onsib sible le for for revi review ewin ing g the the bank banks’ s’ environmental policies, strategies and programs.
The committee will be comprised of directors from the board in case of scheduled Bangladeshi banks and regional chief of global office and members from fr om the top management including chief executive in case of foreign banks. The banks will allocate a considerable fund in their annual budget for green banking, and set up a separate green banking unit. A senior executive should head the unit, which will report to the high-Power high-Powered ed committee committee time to time. They will have to comply with the instruction instructionss stipulated in the detailed guidelines on Environmental Risk Management. The banks will also incorporate environmental and climate change risks as part of the existing credit risk method methodolo ology gy prescri prescribed bed to assess assess a prospe prospecti ctive ve borrow borrower. er.
The banks banks should should take
measures measures to save electricity, electricity, water and paper consumptio consumption, n, according according to the BB guidelines. A 'Green Office Guide' or at least a set of general instructions should Page 22
be circulated among the employees. Instead of relying on printed documents, online communication should be extensively used (where possible) for office management.
Energy Energy saving bulbs should should replace the regular regular ones in branches/off branches/offices ices of the banks. They should make plans to use solar energy on their premises, and encourage employees to purchase energy efficient cars.
4.3 Roles of Green banking The people of the whole world are concerned about the environmental degradation, especially the rising of global temperature and thereby melting of glaciers and ice-berg in the polar region region and consequently rising of of sea level, which will directly affect the low lying countries of the world. The world conscious people are also concerned about the increase increase of Green House Gases and Chlorofluo Chlorofluorocarb rocarbons ons (CFCs) (CFCs) and thereby depletion of Ozone layer. As such, every person and especially the professionals must have greater role to check the environmental degradation. 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 in-house environment and also can initiate the protection of the air pollution, water 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. Otherwis e, the environmen environments ts where the concerned concerned person lives will be inhabitabl inhabitablee 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 greater role to conserve conserve the environment environment,, maintain maintain biodiversit biodiversity, y, not to Page 23
endanger endanger other fauna and flora and above all a green, healthy healthy planet 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 cannot remain indifferent to this burning issue. A banker or a banking industry may address many issues to save environmen environmental tal degradat degradation ion and conserve conserve the the ecolog ecological ical balance. balance.
Green banking banking is a
good way of making people aware of global warming. warming. Each businessman will contribute to the environment and and make make this earth a better place to live and enjoy. enjoy. In addition, it is envisaged envisaged that this institution institution is going going to work towards towards reducing reducing the country's country's dependence on foreign energy sources, fighting climate change
and creating creating additional additional jobs through through the provision provision of healthier healthier energy generation generation facilities. Green finance may cover all the financial services related to the promotion and development of of green industry and green economy where the environmental benefits in terms of reduced reduced carbon dependency or reduced reduced ecological ecological scarcity are the most significant. Green banking practices of banks are connected with both internal operation and product product ecology. ecology. Some banks banks are engaged engaged in carbon offsetting, offsetting, which refers 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. Page 24
There is no doubt doubt that the combined combined threats associated associated with climate climate change change and biodiversity loss call for a deeper commitment of resources and investment from all stakeholders. In the endeavor of emission reduction and 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 online bankin banking g by eliminat eliminating ing paper paper waste, waste, saving saving gas and carbon carbon emission, reducing printing costs and postage expenses.
4.4 Green Banking practices Practices of in house Green Banking: Waste Management:
A green banker must be cautious about wastage and waste management. We should try to control control the wastage of resources resources like water, gas, electricity electricity,, paper, foods etc. For example, if we draft our letters on a computer rather than in paper, it will save millions Page 25
of paper as well as thousands thousands of trees that provide provide raw materials materials for paper production. Similarly, if we select a location of the branch of a bank with sufficient access to light and air, it will save huge electricity and create a healthy environment. Wastages must be grouped like organic and inorganic wastage. Organic materials like food, vegetables, animals etc. can be recycled for manure, gas and electricity etc. The inorganic material like paper, bottles, pots etc. can be recycled. Wet and degradable materia materials ls can be process processed ed direct directly ly keepin keeping g under under the soil. soil. The recyc recycling ling materia materials ls should be disposed off at the respective disposal site and the rotten items should be buried under the soil and as such, pollution can be be protected.
Clean and hygienic environment:
A green banker will not throw any waste, bottles or packing materials here and there. Each group group of waste should should be kept in a separate separate place, which does not pollute the environment and all the wastes must be disposed off separately. A green banker will not spit or cough on the the floor, walls or on the road.
On line statements, emailing documents:
We must send account statements statements and balance confirmatio confirmation n etc. to the clients through onli online ne and and thro throug ugh h emai email, l, whic which h will will save save pape paper, r, time time,, cost cost and and abov abovee all all the the environment. We may use these technologies for our clients as well as interbank correspondence.
Sound Pollution:
We should keep our voice low when we converse and also convince our clients 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 or using shared vehicles instead of personal vehicle:
Since Bangladesh is an energy deficit country we can install solar panels in all Branches as an alternative alternative energy energy source. source. We can also use the vehicles vehicles which consume 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 in the roads.
Page 26
Practices by the Bankers in their business area
Financing only the green projects:
Bankers must be aware of the environmental issues and they must go for financing the projects that do not pollute the environment. The industries that are financed by the banks must have effluent treatment plant (ETP), recycling facilities and smoke and gas arresting unit. The industries must not release any kind of effluents, eff luents, chemicals or smoke smoke to the environment. environment. Banks Banks must not finance any dirty project project that pollutes pollutes the environment. Voluntary activities of Banks:
Banks should take initiative to make their clients aware by organizing seminar and symposium. They can organize awareness campaign in schools and colleges. They can participate in the tree plantation and cleanliness programmes in city areas.
Working on specific green project:
Our country has lot of problems of proper waste management, drainage and sanitation, and affected affected by river river pollut pollution ion,, water water pollu pollutio tion n by pestici pesticides des etc. Every Every bank bank can undertake a specific green project for removal of existing polluting substances from the ecosystem.
4.5 Areas of Green Banking Green Bank comes in many forms. Using online banking instead of branch banking. Paying Paying bills bills online online instead instead of mailin mailing g them. them. Openi Opening ng up CDs CDs and money market market accounts at online banks, instead of large multi-branch banks.
Green Bank looks at green banking in three areas - operational, technological and client acceptance. Banks have made improvements in the operational area such as replacing our daily daily courie courierr servic servicee with with scans scans and electro electronic nic delive delivery. ry. All employ employees ees receive receive paychecks and reimbursement checks electronically.
Page 27
4.6 Green Banking products and services Financial institutions are rushing to market with new or re-packaged product and service Offer Offerin ings gs from from green green auto auto insu insura ranc ncee to inno innova vati tive ve propro-eco eco mort mortga gage gess and and new new sustainability-backing investment funds.
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.
Green Mortgages and Loans : A green mortgage mortgage offers better rates or terms for energy
effic efficie ient nt hous houses. es. Gree Green n mort mortgag gages es can allo allow w home home buye buyers rs to add add as much much as an additional additional 15 percent percent of of the price of their house into loans for upgrades upgrades including including energy-efficient energy-efficient windows, windows, solar panels, panels, geo-thermal geo-thermal heating heating or water heaters. heaters. The savings in monthly energy bills can offset the higher monthly mortgage payments and save money in Page 28
the long run. The Energy Efficient Efficient Mortgage Mortgage (EEM) is a type of HUD-approve HUD-approved d green mortgage mortgage that will credit you for your your home’s home’s energy energy efficiency efficiency in the mortga mortgage ge
itself. itself. Many Many home home improvem improvement entss also qualify qualify for the energy energy tax credit credit..
Anyone undertaking an energy-saving house project should shop around for a bank that offers a special rate for a green mortgage or loan.
Green Credit Cards : A green credit card allows cardholders to earn rewards or points
which can be redeemed for contributions to eco-friendly charitable organizations. These cards offer an excellent excellent incentive incentive for consumers consumers to use their green card for their expensive purchases. Imagine the millions of dollars that could be raised for worthwhile environmental groups if green credit cards really took off.
Green Reward Checking Accounts: A product called reward checking accounts pays a
bonus rate to customers who go green. Customers can earn higher checking account rates if they meet monthly requirements like receiving r eceiving electronic statements, paying bills online or using a debit or check card. With this banking product higher rates and ecofriendly livings go hand-in-hand.
4.7 Prospects of Green Banking The banking sector may also have significant impacts on biodiversity while providing financial financial support support to high impact sectors such as forestry, forestry, mining, mining, oil and gas, fisheries, and infrastructure. In project finance, banks may exercise their powers powers through assuming assuming roles as environme environmental ntal policeman policeman to ensure that their borrowers borrowers comply with the environmen environmental tal standards, standards, and and could could enter enter into a partners partnership hip with with different 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 banking services. A common platform or unique approach by the policy makers and civil society groups in all coun countrie triess or regio regions ns would would give give the best result. result. Howeve However, r, creatin creating g a common common platform and launching a uniform approach would require major political effort by all global global economies economies - a tough job. Bangladesh Bangladesh Bank has already provided provided Tk 200
Page 29
crore for renewable energy in which the share of green energy would be 2 per cent in total energy.
Page 30
Shahjalal Shahjalal Islami Islami Bank Limited (SJIBL (SJIBL)) commen commenced ced its commer commercial cial operati operation on in
accordance with principle of Islamic Shariah on the 10th May 2001 under the Bank Companies Act, 1991. During last eight years SJIBL has diversified its service coverage by opening new branches at different strategically strategicall y important locations across the country offeri offering ng variou variouss service service produc products ts both both investm investment ent & deposi deposit. t. Islamic Islamic Bankin Banking, g, in essence, is not only INTEREST-FREE banking business, it carries deal wise business product thereby generating real income and thus boosting GDP GDP of the economy. Board of Directors enjoys high credential in the business arena of the country, Management Team is stron strong g and and supp suppor orti tive ve equi equipp pped ed with with excel excelle lent nt prof profess essio iona nall know knowled ledge ge unde under r leadership of a veteran Banker Mr. Muhammad Ali. Name of the Company Shahjalal Islami Bank Limited Legal Form A public limited company incorporated in Bangladesh on 1st April 2001 under the companies Act 1994 and listed in Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited. Commencement of Business 10th May 2001.
Phase- 1: A separate Green Banking Unit or Cell will be established having responsibility of designing, designi ng, evaluatin evaluating g and administeri administering ng related green banking banking issues of the bank. A senior senior executive should be assigned with the responsibility of heading the unit. The unit will report to the high powered committee time to time.
5.1 Incorporation of Environmental Risk in CRM: SJIBL has adopted ERM Guidelines as per DFIM Circular No.4 dated April 6, 2011 issued from of Financial Institutions and Markets of Bangladesh Bank. SJIBL shall comply with the stipulated in the detailed guidelines guidelines on Environmental Risk Management (ERM) in cons consid ider erat atio ion n of a part part of the the Gree Green n Bank Bankin ing g Poli Policy cy.. The The Bank Bank has has alre alread ady y incorporated Environmental and Climate Change Risk as part of the existing credit risk methodology (CRG) adopted to assess a prospective borrower. This This will include integrating environmental risks in the checklists, audit guidelines and reporting formats. All of this will help mainstream Environmental Risk that cover possible of Environmental Risk such as Land use, Climate change c hange related relate d events (cyclone, drought), animal animal diseases/pathogens diseases/pathogens such as avian influenza, solid waste including waste feed, animal waste, carcasses, sediments, Page 31
wastewater discharges, hazardous, materials, etc will be reviewed under Environment Environmental al Due Diligence (EDD) checklists.
5.2 Initiating In-house Environment Management: SJIBL shall prepare an inventory of the consumption of water, paper, electricity, energy etc. by its offices offices and branch branches es in differen differentt places. places. Then it it will take take measures measures to save save electri electricity city,, water and paper consumption. consumption. A 'Green Office Guide' or at least a set of general instructions will be circulated to the employees for efficient use of electricity, water, paper and reuse of equipment’s.
5.3 Green Office Guide: The guide comprises of the following instructions:
In place of relying on printed documents, online communication will be extensively used (where possible) for office management to reduce use of paper alongwith making unnecessary duplicates of same document.
Make sure that the printers are defaulted to duplex for double-side printing to save papers. papers.
Bank will apply Eco-font in printing to reduce use of ink,
Use scrap paper as notepads
Avoid disposable cups/glasses to become more eco-friendly.
Installation of energy efficient electronic equipment’s
Instal Installat lation ion of 'Power 'Power save save Mode' Mode' of comput computers ers and ensuri ensuring ng shutdo shutdown wn of computer while not using and leaving the office place.
Ensuring switching-off switching-off fans, lights, air coolers etc., while not using and leaving the office place that will help reducing electricity consumption.
Page 32
Energy saving bulbs should replace normal bulbs in branches/offices of the banks. issues should be taken steps to save energy from corporate business travel and
Employees are encaged to avoid using vehicle to reduce gas and petroleum consumption
Minimum utilization of electric bulb in day-time
Minimum utilization of AC during the rainy season and winter.
Avoiding use of electric appliance during peak SJIBL.
Keeping the temperature level of AC not below 20 degree centigrade.
Avoiding wearing of coat-tie during summer to l essen use of AC.
Encage clients of take e-statements
Encage the clients to use ATM cards instead of Cheque-Books.
Advertising through electronic media avoiding the print Medias.
Tele-Conference and Video conference should be arranged to avoid travels and reduce use of fossil fuel.
Reduce wastage of water
Reduce wastage of tissue papers.
5.4 Creation of Climate Risk Fund: Bank will finance the economic activities of the flood, cyclone and drought prone areas at the regular profit rate without charging additional risk premium. However, banks will assess their environmental risks for financing the sectors in different areas for creating a Climate Change risk Fund with the approval of the Board of Directors. This will be used in case case of emer emerge genc ncy y. The The bank bank woul would d ensu ensure re regula regularr financ financing ing flows flows in these these vulnerable areas and sectors. The fund could be created as part of bank's CSR expenses. expenses. Page 33
5.5 Introducing Green Marketing: Green marketing is the marketing of products that are presumed to be environmentally safe. safe. Green Green marketi marketing ng incorp incorporat orates es a board board range range of activiti activities, es, includi including ng produc productt modifi modificati cation, on, change changess to the produc productio tion n process process,, packagi packaging ng change changes, s, as well well as modifying modifying advertising. advertising. It refers to the process of products products and/or and/or services services based on their environmental benefits. Such a product or service may environmentally friendly in itself of produced and/or packaged in an environmentally friendly way. I. To make adverti advertisemen sementt through through electronic electronic media media (Radio, Televi Television sion)) II. In the the adve advert rtis isem emen ents ts clie client ntss woul would d be enca encage ged d to use use ATM ATM card cardss inst instea ead d of cheq cheque ue books books and let them know that is how they are pr otec ot ec ting ti ng thei th eirr en viro vi ro nmen nm entt fo r thei th eirr future generation. ge neration. III. Through Through advertis advertisemen ementt the clients clients will be encaged encaged for the follow following ing
E-Banking (E-Transaction, E-Statement)
Tele-Banking
On-line Banking
SJIBL Green Finances
5.6 Online Banking: SJIBL will undertake bank transactions or paying bills via the Internet on a secure website that will allow the customers to make deposits, withdrawals and pay bills. SJIBL shall give more emphasis to make the easiest way to help environment by eliminating paper pape r waste, was te, saving sav ing gas and carbon car bon emission, reducing printing costs and postage expenses.
Phase -II: Page 34
5.7 Sector Specific Environmental Policies: The The Bank Bank will will form formul ulat atee stra strate tegi gies es to desi design gn spec specif ific ic poli polici cies es for for diff differ eren entt environmental sensitive sectors such as Agriculture, Agri-business (Poultry & Dairy), Agro Agro farmi farming ng,, Leat Leathe herr (Tan (Tanne nery ry), ), Fisherie Fisheries, s, Textil Textilee and Apparel Apparels, s, Renewab Renewable le Energy, Pulp and Paper, Sugar and distilleries, construction and housing, Engineering and Basic Basic Metal Metal,, Chemic Chemicals als,, rubber rubber and plast plastic ic indust industry ry,, Hospit Hospital/C al/Clini linic, c, Chemic Chemical al Trading, Brick Manufacturing, Ship Breaking etc.
5.8 Green Strategic Planning: The Bank will determine green targets to be attained through strategic planning. A set of Achievable targets and strategies will be determined and those will be disclosed in the annual report and website for green financing and in-house environment management. For in-house environment management, the target areas should cover attaining energy efficiency in the form of the use of renewable energy, reduction of electricity, gas and petrol consumption, consumption, reduction of Green House Gas emissions, issuance or e-statements, electronic bill pay, saving papers, environment friendly office building etc. For green financing, financing, the target areas should should cover reducing loans for certain enviro environme nmental ntally ly harmful harmful activi activities ties,, attaini attaining ng a particular percentage perce ntage of environmental environ mental loans as percentage of total, total, introducing introducing eco-friendly eco-friendly financial products products etc.
5.9 Improved In-house environment management: Strategy of re-use, re-cycling of materials and equipments, and SJIBL reduction and waste minimization strategy will be, part of in-house environment management. Banks will increasingly rely on virtual meeting through the use of video conferencing in lieu of physical travel which will help saving cost and and energy. energy.
5.10 Formulation Formulation
of Bank’s
specific specific environmen environmental tal
risk
management manageme nt plan and guidelines: guidelines: Bank Bank will will deve develo lop p and and follo follow w and and an envi enviro ronm nmen ental tal risk risk manag manageme ement nt manu manual al or guid guidel elin ines es in thei theirr asse assessm ssmen entt and and moni monito tori ring ng of Proj Projec ects ts and and Work Workin ing g Capi Capita tall inve invest stm ment. ent. In addi additi tion on to the the com complia plianc ncee of nati nation onal al regu regula lati tion on,, the the will will set set Page 35
internationa internationally lly accepted accepted higher higher environment environmental al standard. standard. In this connectio connection, n, SJIBL SJIBL will be involved involved in the Green Initiatives to be be taken by a group of Banks Banks.
5.11 Rigorous programs to educate clients Business houses will be encaged and influenced to comply with the environmental regulations regulations and undertake undertake resources efficient and environmental environmental activities. activities. The Bank will introduce is program to educate educate clients. clients. Considering Considering the responsibili responsibility ty of making making the clients well aware of issues the Bank will implement the following following programs: programs:
Messa Message gess for for prot protec ecti ting ng envi enviro ronm nment ent in SJIB SJIBL L all all sort sortss of Mark Market etin ing g and and Promotional Activities.
Focu Focusin sing g on enviro environm nmen ental tal issue issuess while while select selectin ing g inve investm stmen entt clien clients ts and and communicates its importance by setting Environmental Risk as a deciding factor.
Making Making the bank's bank's website website as an import important ant tool tool that that we are doing doing Green Banking and making SJIBL clients green as well. The Website will be used for societal movement towards more social and environmental responsibilities in the financial sector.
Inviting Inviting clients in seminar, seminar, symposium symposium and other celebration celebration program program where facts, figures and pictures will be exhibited regarding how the environment is deter iorating iorat ing and how are activities activities can prevent prevent those for SJIBL SJIBL sustainabi sustainability. lity.
Bank Bank will will prom promote ote socia socially lly/en /envir vironm onment entall ally-g y-gear eared ed inve investm stmen entt client clientss by recognizing them as their green clients.
Page 36
MIRPUR Branch at a Glance
SJIBL established its 23rdBranch in Mirpur-10 at 01-11-2001. The Branch is banking with various types of account holders of deposit accounts as well as investment accounts. We have a mentionable amount of SBIS, HDS, and RDS investment in our branch. Huge number of foreign deposit accounts is also here. MSS deposits deposits are also increasing increasing day by day. day. There are some valued valued investment clients who want to get specialized service. On the other hand, the other Banks situated in this area like Dhaka Bank, Uttara Bank, Sonali Bank etc. are offering various products, specialized service with advanced technology to attract the clients. In such situation, it is the time-need for our Branch to provide sufficient manpower, to update digital programs & other logistics support in order to deliver prompt & up to date banking service, to reduce untold pressure of voluminous works, to achieve the targeted goal & to survive in the 21st century competition.
Page 37
Qualitative INTERVIEW AND answer: I took a survey from Employees in Mirpur branch, the summery of that survey given bellow. •
1st question was Do Shahjalal Islami Bank Mirpur Mir pur Br. Invest on “Solar power” or “Eligible for renewal power” or any “alternative power source” to save environment? All the employee give same answer that they do not have these type investment yet but SJIBL has.
•
2nd Quest Questio ion n was was “ Does Mirpur br. has any investment rate waiver for environment saving Project?” Differe Different nt employ employees ees give give differe different nt answer. answer. This This may cause cause them them not practicing that much Green Banking function. And another reason that one of employee of investment department told “they do not get any Page 38
application that can fully satisfy “environment saving project”. If they get any any of this this type type appl applic icati ation on for for inve investm stmen ent, t, they they woul would d consi conside der r investment rate waiver as per rules of head branch.
•
3rd question was “Do you have any tree plantation programme?” This This time time all employ employee ee give give similar similar answer that they they have have this this type type programme.
•
4th question was “Do you provide any training to your partners or buyers for environment saving activities?” Maximum employee told they do not directly provide any training to them them but but they they prov provid idee guid guidel elin inee and and make make sure sure that that appl applic ican antt got got certificates from “Department of Environment” of Bangladesh.
•
5th Question was “Does this Br. Have any policy about Green banking?” – All the employee ensure that The Mirpur branch have Green Banking Policy.
•
6th Question was “What “What steps are taken for saving papers as well as tress?” Collective answer is “we are trying to preserve our documents in CD other than hard copy. Printing in both side of a single page and printing ink quality always economy mode or less color.”
•
7th Quest Questio ion n was was “Give Give me some some info inform rmat atio ion n abou aboutt SJIB SJIBL L green green bank bankin ing g activities” activities” Collective answer is :i) Before Before invest investing ing any inves investme tment nt to any industry industry,, we investi investigat gatee whether whether these remain any treatment plant or not ii) Branch Branch wise we always always preserve our docume documents nts through through CD. iii) We now introdu introduced ced Remittance Remittance card to people people iv) We are now encouragin encouraging g people to use ATM cards cards and ATM service.
Page 39
v) We are conduct conducting ing differe different nt seminar seminarss for make make people people aware for using using ATM cards, Mobile banking service, Internet services, online banking as well as Green Banking. vi) We gave tree to our account account holder as our tree plantation plantation programm programme. e. vii)We are working with farmers for helping them. viii viii))
Our enti entire re task task is acco accom mplish lished ed thro throug ugh h net netwo work rk and and fas fast. t.
ix) A team investi investigat gates es where where the inverto invertors rs doing doing well or not accordi according ng to investment contract in regular basis. x) Inve Invest stin ing g on ren renewab ewable le ener energy gy and and advi advisi sing ng and and work workin ing g with with entrepreneur to ensure green banking. xi) xi) Main Maintai tain n all all rule ruless and and regul regulati ation on that that Bang Bangla lade desh sh Bank Bank decl declar ared ed for for Green Banking.
•
8th Question was “Would “Would you please tell about some green baking activities of Mirpur Br .” .” Answer is “employees of MIRPUR Branch are advice to make aware all the clients about reducing Gas consumption, pollution and other wastage of other other resourc resources. es. This This branch branch now trying trying to increas increasee ATM, ATM, Mobile Mobile banking, internet banking services and trying invest in environment friendly projects.
•
9th Question was “ Future Planning for Mirpur Br. about about green banking ” Answer for these question is “N/A” or “it is subject to head office or top class officer” mainly this may not their sector but they told they have a program to reach to 16 crore people of Bangladesh. And there will be no need to have any branch service. All the funtion will be done by using internet or mobile from their own living place.
Final and 10 h Question was “Some “Some recommendation that ShahjalalIslami Bank ltd. can do for batter practice of “Green Banking ” Answer is : I.
Bank Bank should should establ establish ish intern internal al recyclin recycling g system system for recyclin recycling g its wastage. Page 40
II.
Ensure the proper utilization of internal resources
Green Banking performance of Mirpur Branch Total Number of ATM card User of Mirpur branch Total Number of Mobile Banking service User Total number of clients of Mirpur clients Amount of avg. daily transaction of Mirpur branch Amount of avg. daily transaction of Mirpur br. By using ATM cards Amount of avg. daily online transaction of Mirpur branch Amount of of av avg. dai dailly tra tran nsact sactiion of of Mi Mirpur br. br. By using Mo Mobile ba banking Amount of investment on Agricultural sector
750 50 1500 15,00,00,000 1,50,000 1,50,000 50,000 1,50,00,000
Page 41
Findings The report findings about green banking policy of Mirpur of SJIBL and SJIBL are given below: 1. A big portion of Mirpur Branch’s investment is invested transport sectors, which
is one of the main contributors to pollute Dhaka City &MIRPUR Branch has a great scope to do green banking. 2. They have very low performance in ATM service, online service, and internet
service 3. . Maximum numbers of Employees are not aware about Green Banking. 4. Mirpur Branch’s a large portion goes to brick field and the branch incumbent is
motivated to install Zig-ZagChimne in their brick fields. Also to create awareness among the clients, this branch organized seminar sometimes. Before investi investing ng in any project project they they only only consid consider er on what what “Depart “Departmen mentt of 5. Before Environme Environment nt of Bangladesh” Bangladesh” ( িপেরবশিঅধদর ). ). gave certificate or not; and do the applicant have adequate mortgage property or not. 6. SJIBL are now offering student’s accounts. That is a good idea but they just
offering offering minor students students and guardian of those students are mainly operating operating this account. But SJIBL should focus specially on Student not Minor. Because they are now most advance and using advance technology
Page 42
Recommendation Bank should keep following aspects in mind while financing any projects: 1. Anal Analy yzing zing the the pro project ject in term termss of scal scale, e, natu ature and and the the magni agnitu tude de of environmental impact. The project should be evaluated on the basis of potential negati negative ve and positi positive ve enviro environme nmental ntal effects effects and then then compare compared d with with the ‘wit ‘witho hout ut proj projec ectt situa situati tion on’. ’. Ther Theree shoul should d be an Envi Enviro ronm nment ental al Impa Impact ct Assessm Assessment ent (EIA) (EIA) of each each project project recomm recommend ending ing the measur measures es needed needed to prevent, minimize and mitigate the environmental negative impact before financing the projects. 2. While investin investing g or funding funding the projects, projects, the the financial financial institutio institutions ns should should assess the sensitive issues like vulnerable groups; involuntary displacement etc and projects should be evaluated in terms of environmentally important areas including wetlands, forests, grasslands and other natural habitats. 3. Bank Bankin ing g inst instit itut utio ions ns need need to eval evalua uate te the the valu valuee of real real prop proper erty ty and and the the potential environmental liability associated with the real property. Therefore, the banks should have right to inspect the property or to have an environmental audit performed through the life of the loan. 4. Banks Banks also need to monitor monitor post post transa transactio ction n for the ideal ideal enviro environme nmenta ntall risk management program (Rutherford, 1994) during the project implementation and operation. There should be physical inspections of production, resources, training and support, environmental liability, audit programs etc. 5. The next next round round of evalua evaluation tion includ includes es loan structuri structuring, ng, credit credit approval approval,, and cred credit it revie review w and and loan loan mana managem gement ent.. Furt Furthe herr bank bankss have have annu annual al audi audits, ts, quarterly environmental compliance certificate from the independent third party and also from the government
Further the banks can introduce green bank loans and products like : i.
Investi Investing ng in enviro environme nmenta ntall project projectss (recycl (recycling ing,, farming farming,, technol technology ogy,, waste, waste, etc) etc) for
example example reduced-rate reduced-rate of interest interest on loans to homeowner homeownerss who install install a
solar energy system ii. ii.
Prov Provid idin ing g opti option on for custom customer erss to invest invest in enviro environm nmen ental tally ly friend friendly ly banki banking ng products
Page 43
iii. iii.
Investi Investing ng in in resour resources ces that that com combin binee ecolog ecological ical concern concernss and social social conc concern ernss
Conclusion There is a growing awareness among banks and financial institutions to protect the Page 44
environment and thereby save 'mother planet'. Big banks are committing large funds on a 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 competiti competitiven veness. ess. We provid providee the service service at no cost to our our retail retail and business 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.
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, policy makers, civil society organizations, international development and financial institutions, business entities and the common people (consumers).
REFERENCES E-Books:
Page 45
1. R.N. Dash, 2008, “Sustainable “Sustainable ‘Green’ Banking: The Story Story of Triodos Bank” Bank”
Available at: www.scribd.com/doc/373881 www.scribd.com/doc/37388173/Sustainable-Green-Banking 73/Sustainable-Green-Banking Gelder, (2006), (2006), “Sustainable “Sustainable Banking in Practice: A closer look 2. Jan Willem van Gelder, at the nominees for the 2006 Financial Times Sustainable Banking Awards”, Banktrack.,Profundo. Available at: www.accman.in/images/j11/Green_Banking_ (2).doc 3. Jeucken, M (2001) “Sustainable Finance and Banking, The finance Sector and The Future of the Planet”. London, Earthscan. Available at: www.accman.in/images/j11/Green_Banking__(2).do www.accman.in/images/j11/Green_Banking__(2).docc 4. PravakarSahoo, Bibhu Prasad Nayak, 2008, Green Banking in India Available at: teriin.academia.edu/bibhuprasadnayak/.../Green_Banking_in_In teriin.academia.edu/bibhuprasadnayak/.../Green_Banking_in_India dia 5. Dr. K.A. Goyal and Vijay Joshi, 2011, A STUDY OF SOCIAL AND ETHICAL ISSUES IN BANKING INDUSTRY Available at: www.ijeronline.com/.../Vol%202%20issue %205/ijer20110205SO(5) (1989). Business Ethics in Banking. Banking. Journal of Business Ethics Ethics 8(8) 6. Green, C.F. (1989). p. 631-634. Available at: www.academicjournals.org/AJBM/PDF/pdf2011/18Jan/Safakli.pdf 7. UNEP Finance Initiatives, 2002, Financial Institution Initiative Signatories, Signatories, Available at” http:/unepfi.net/fii/signatories_country.htm Web links: http://en.wikipedia.org/wiki/Ethical_banking i. ii.
http://en.wikipedia.org/wiki/Ethical_banking
iii.
http://www.Greenbankreports.com http://www.Greenbankreports.com
iv.
http://www.Bangladesh-bank.org/greenbankingorder http://www.Bangladesh-bank.org/greenbankingorder
v. vi. vii. viii.
http://greenbankreport.com/eco-friendly-banking/what-is-green-banking/ http://www.thedailystar.net/newDesign/news-details.php?nid=149676 http://www.accountingtools.com/dictionary-remote-deposit-capt http://www.investopedia.com/terms/o/onlinebanking.asp
ix.
htpp://www.bb.org.bd/mediaroom/circulars/brpd/jan302011brpd01e.pdf htpp://www.bb.org.bd/mediaroom/circulars/brpd/jan302011brpd01e.pdf
x.
http://www.bb.org.bd/mediaroom/circulars/brpd/feb272011brpd02e.pdf http://www.bb.org.bd/mediaroom/circulars/brpd/feb272011brpd02e.pdf
Page 46
xi. xii. xiii.
http://www.banktech.com http://www.banktech.com ; and so on… http://www.thedailystar.net/newDesign/latest_news.php?nid=32672 http://www.thefinancialexpress-d.com/more.php?page=detail_news&date=201202-07&news_id=97263
Page 47
Acronyms or Abbreviations AD B
: Asian Development Bank
CO2
: Carbon dioxide
EE
: Energy Efficiency
Govt
: Government
IIDF IIDFC C
: Ind Indu ustri strial al and and Infr Infras astr tru uctu cture Deve Develo lopm pmen entt Fin Finan ance ce Com Company pany Ltd
IF C
: International Finance Corporation (of the World Bank Group)
SME
: Small and Medium Enterprises
UNDP
: United Nations Development Pr Programme
WB
: World Bank
EE
: Energy Efficiency
GEF
: Greenhouse Gases
IIDF IIDFC C
: Ind Indu ustri strial al and and Infr Infras astr tru uctu cture Deve Develo lopm pmen entt Fin Finan ance ce Com Company pany Ltd
IF C
: International Finance Corporation (of the World Bank Group)
REER
: Real Effective Exchange Rate
UNDP
: United Nations Development Pr Programme
Page 48
