A green bank is controlled by same authorities as what a conventional bank does, but it holds some distinctive characteristics over conventional banking practices. In conventional banking practices, it's been unclear where the money depositors or investors put into a bank actually goes- doesn’t go for a good cause. But a green bank gives the reassurance of knowing where investor’s money is - and isn't - going to when they go to deposit their cash. A green bank checks all the factors before lending a loan, whether the project is environment friendly and has any implications in the future; they will award a loan only when the project follows all the environmental and safety standards.
The Banking Regulation and Policy Department (BRPD) of Bangladesh Bank in its “Policy Guidelines for Green Banking” has termed Green Banking as a component of the global initiative by a group of stakeholders to save environment. From this policy guideline it is clear that the Banking Watchdog would like to see that the banks would act under Green Banking guidelines and green banks do not only improve their own standards but also affect socially responsible behavior of other business.
Benefits of Ethical/Green Banking
• Basically Ethical banking avoids as much as paper work, we get ‘go green’ credit cards, ‘go green’ mortgages and also all the transactions done through online.
• Creating awareness to business people about environmental and social responsibility enabling them to do an environmental friendly business practice.
• They follow environmental standards for lending, which is really a good idea and it will make business owners to change their business to environmental friendly which is good for our future generations.
• When a business is awarded with a loan, the interest of that loan is comparatively less compared to conventional banks; because ethical banks give more importance to environment friendly factors they do not operate business with high interest rates.
* Eco-friendly banks, also called green banks, as a way to help reduce the carbon footprint from banking activities.
* An important and easy aspect of Green Banking is online banking. The environment and the banking industry both benefit when more bank customers start to use the online banking services that are available. Benefits of online banking include less paperwork, less mail and less driving to branch offices by bank customers, which all have a positive impact on the environment. Interestingly, online banking can also increase the efficiency and profitability of a bank. * A bank can lower their own costs that result from paper overload and bulk mailing fees as more customers use online banking.
* Green Banking can also reduce the need for branch banks and customer service representatives. So if a bank is not utilizing Green Banking, shareholders of the bank may start asking....why not? * Banks can do more to help the environment than just promote online banking. A truly green bank will reduce their carbon footprint by -
• building more efficient branches,
• implementing energy-efficient operational procedures,
• offering transportation services for their employees, • promoting sustainable banking and increasing their lending in environment- sensitive industries.
• Banks can also support eco-friendly groups and raise money for local environment initiatives. Their products can also reflect their green mission.
Products of Green Banking:
Green Deposits: Banks can offer higher rates on CDs, money market accounts, checking accounts and savings account if we opt to conduct the...