An Evaluation Of Green Banking Practices In Bangladesh

Topics: Bank, Online banking, Environmentalism Pages: 7 (3916 words) Published: March 25, 2015
IOSR Journal of Business and Management (IOSR-JBM)
e-ISSN: 2278-487X, p-ISSN: 2319-7668. Volume 16, Issue 11.Ver. IV (Nov. 2014), PP 67-73 www.iosrjournals.org

“An Evaluation of Green Banking Practices in Bangladesh” 1

Mohammad Hassan Shakil*2Md. Kazi Golam Azam, 3Mashiyat Tasnia and 4
Ziaul Haque Munim

1. Graduate Studies, INCEIF-The Global University of Islamic Finance, Kuala Lumpur, Malaysia. 2. Assistant Professor, Department of Business Administration, International Islamic University Chittagong, Bangladesh.

3. Graduate Studies, INCEIF-The Global University of Islamic Finance, Kuala Lumpur, Malaysia. 4. Research Institute of Supply Chain Management, Vienna University of Economics and Business, Vienna, Austria.

*E-mail of the corresponding author: hassan.shakil007@gmail.com

Abstract: Green Banking is any form of banking that benefits the environment. Green banking shifts banks from the „profit, profit and profit motive to „planet, people and profit‟ motive. Green banking is very important in mitigating the Credit Risk, Legal Risk, Security Risk and Reputation Risk in the banking sector. The study mainly aims to analyze the Green Banking practices among SCBs, SDBs, PCBs and FCBs in Bangladesh. The study is of analytical and theoretical in nature based on secondary data. The study finds that 47 banks have adopted the Green Banking policy, formed Green Banking Unit, allocated and utilized budget for green banking. But the allocation and utilization of budget of SCBs and SDBs are not satisfactory. Online banking and ATM facilities of SCBs and SDBs are very poor. It is also found that there is a sharp increase in giving loans to environmentally friendly projects by banks. Researcher found that some banks still do not and some banks are in the first phase in the policy guideline set by BB. The greatest reason for not to adopt Green Banking perhaps is that it often require a large initial cost. As SCBs and SDBs are far behind to adopt online banking and ATM facilities, our government should provide enough fund and technical support to them. Bangladesh Bank should enforce SCBs, SDBs, PCBs and FCBS, that they should assess the sensitive issues like vulnerable groups; involuntary displacement etc while investing or funding the projects. Keywords: GB= Green Banking, FCBs = Foreign Commercial Banks, PCBs = Private Commercial Banks, SCBs = State owned Commercial Banks, SDBs = Specialized Development Banks.

I.

Introduction

„Green‟ in some studies refers to define a broad range of social, ethical and environmental practices. Though, for the purpose of the study that tends to look into environmental aspect, “green” in the discussion primarily describe banks‟ impacts on the environment, environmental responsibility as well as environmental performances in their activities. Green banking means promoting environmental-friendly practices and reducing carbon footprint from banking practices. This could be done in many ways such as by using online banking instead of branch banking, paying bills online instead of mailing them, opening up CDs 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. As one of the least developed countries Bangladesh is the worst sufferer of world environmental pollution through industrialization of the western countries. Under such extreme environmental threat, the financial sector of Bangladesh is playing a key role as one of the important stake-holders of the economy enforcing the businessmen/ industrialists of the country to design their various strategy/action plans keeping in mind the crucial environmental issues. Green banking (GB) is a component of the global initiative by a group of stakeholders to save the environment.

II.

Objectives of the study

The study mainly aims to analysis the green banking practices among State-owned Commercial Banks...

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