Assignment on Green Banking

Submitted to:
Ms. Nusrat Farzana
Assistant Professor
School of Business & Economics
United International University, Dhaka

Submitted by:
Nusrat Jahan – 111 163 071
Section: A
Course Name: Principles of Banking & Insurance
Course Code: FIN 3337 (A)

United International University

Introduction
Financial establishments are endeavored in service to people in commission profit. As we all know
that profits ought to come back maintaining the balance between human and nature and shouldn’t
at the expense of the surroundings. So as to shield the surroundings, the construct of Green
banking evolved in response to save lots of our mother nature. The ideology of this idea is to be
green in daily operations, funding of nature conservation comes. This assignment is predicated on
the conception of Green Banking and it applies by banks in Bangladesh. As per the directives of
Bangladesh Bank, banks and different monetary establishments are creating plan to explore
activities of business banks as compared with world Green banking initiatives. Green Banking may
be applicable of banking wherever banks operate in environment-friendly atmosphere and reducing
carbon footprint from banking activities. This idea was developed in western countries, however,
it's currently practiced everyplace to shield the character. Green banking is incredibly vital problems
today as each establishment is creating a trial to shield the setting. Bangladesh Bank has free a
policy guideline for green banking to work during a formal and structured manner in line with the
world norms to guard environmental degradation and guarantee property banking practices. The
financial organization developed the policy to be coated during a time certain manner which is able
to be quarantined into 3 phases. As per the central banks guideline, the money establishments
need to develop green banking policies and show general commitment on setting through in-house
performance, incorporation of environmental risk in CRM, initiating in-house setting management,
and introducing green finance. According to Bangladesh Bank pointers, banks have shaped their
own property Finance Unit and green Banking Policy. It’s noted that everyone the scheduled banks
have disbursed Tk.21, 090.38 million for inexperienced Banking in 2018. Analysis shows that, the
Non-Bank money establishments disbursed a lot of finance for green Initiatives than the regular
Banks. From all scheduled Banks, the non-public business Banks endowed concerning eighty
seven.29% out of total 100% inexperienced funding by the money Sector. within the year 2017,
among all the non-public business Banks, BRAC Bank alone disbursed Tk. 11,000 million for green
Banking apply whereas Dhaka Bank endowed Tk. 6461.85 million for Green Banking and property
development. In 2018, money sector endowed all time-highest quantity of cash for enterprise green
initiatives within the trade associated with utilization and reusable product. The investment
quantity is similar to 34, 22% of their total endowed in green initiatives.
Why do we need Green Banking?

The main objective of green banking is to minimize waste and give priority to nature and society. It
is vital to focus on environment-friendly initiatives by providing innovative financial and ensure
sustainable development.

 Global warming is increasing day by day, due to deforestation, the cutting, and burning of
trees. The frequently changing weather is only causing damage to the environment and thus
adopting Green banking policy very strictly might contribute little benefits to improve
Mother Nature.

 The level of Greenhouse gas is rising day by day for extracting fossil fuels and gases from
ocean belt and coal mining in the forest. The Air Quality Index (AQI) shows that Bangladesh
has declining air quality. The air quality shows an average of 146 AQI which is extremely
harmful to breathe and rated as unhealthy. As greenhouse gas increases and also warming
the air, it increases the carbon-dioxide and decreases oxygen availability. Thus applying the
model of Green banking might help to reduce carbon footprint at least from the banking

sector.

 As the world is expanding its economic horizon, it became a challenge for everyone to strike
hard to achieve the economic target which deprives the protection environment. It is
 addressing that the global population is increasing along with environmental problems. It is
vital for us to save both the economy and nature and maintain a balance which is
considered as called green economic growth. By applying such a theory, we increase
economic growth without harming the natural assets

Pros & Cons of Green Banking

Pros
 Green Bank helps deploy clean energy
solutions that can lower energy bills for
consumers and businesses with no
upfront cost
 Reduces paperwork and rely on online
transactions that ultimately saves trees
Cons
 Lack of personal contact with the bank
officials may sometimes create
problems in banking activities. Many of
banking activities still, need paperwork
which has to be carried out manually
 Users getting acquitted with the online
platform of banks need time

 Create awareness among people about  High level of security concern in the
the environmental and social online transaction because of hacking
responsibility technology

 Instead of branch banking, online  Technical breakdown of websites and

banking saves time server may shutter off accounts
deposits.
Sustainable growth of Green Banking
Green Banking Idea mainly derived from sustainable development. Sustain development gives us an
idea about meeting the needs of the present without harming the future, and laws try to do so to
give the best effort to do this sustainable development. Bank take some necessary steps that
remove the ecological imbalance and make the country better place to breathe, though they are
not fully able to do so they are trying most by using technology as the basic data entry system, they
are trying to avoid the footprint and also they give the highest customer involvement about every
transaction also give some basic ideas to the customer where form the investments comes and
given proper using of a lending system for the future.
Meeting the needs of the present with enough resources for the future, that is called Sustainable
development. The key to sustainable development is to make sure broad-based inclusive economic
growth, with:
 By sustainable development for the banking sector that is replaced by green banking the
natural resources used can be promoted by this topic that is also related to sustainable
development for a bank. Natural resources can be used in a positive way and not to destroy
and save it
 Preservation of regenerating capacity of the ecological system: ecological system can be
regenerated using technology, not to use of papers and footprint, online servicing that all
can be part of regenerating the ecological system.
 The main concern of sustainable development is to avoid risk from the environment for the
future generation, using green banking for financial intuitions can help to achieve this.

Green Banking in Bangladesh Banking Industry

Bangladesh is under heavy climatic disaster due to the increasing effects of global warming. The
greenhouse gas has surrounded the entire atmosphere causing the heat to rise exponentially. The
climate is deteriorating day by day due to the extensive use of natural assets in an ineffective and
inefficient manner. Resources used to manufacture, process, and transform in an ineffective
manner causing industrial effluents. As a result, we face floods, cyclone, and earthquake every year
that disrupts our mother nature. The environment needs proper attention to develop these
problems, and continuous up-gradation to ensure a better future for our future generation. We
need to increase awareness among people who use the goods and services in non- eco-friendly
manner. The financial institutions heavily depended on the paperwork that needs to be prevented
and minimized. Awareness about climate change, improving health and effective sustainable
development plan needs to incorporate in the banking and all other industries to protect our
environment and go green. As banking system holds a major economic control of all organizations
due to its control over financial activities, it is vital for the banks to undertake effective measures in
sustainable green banking solution and be responsible in improving the environment by-
35
 Efficiency of energy uses
 Water consumption and
 Waste reduction,
 Say no to use the paper for work

Conclusion
Green banking is known to be model banking in an environmental-friendly manner that is practiced
by banks to encourage environment-friendly investment. It is a proactive concept and a smart way
of thinking towards future sustainability. It is very significant for the banks to be pro-active and
acceleration in the growth rate of the economy. As there is a continuous change in the economy &
the environmental factors are leading, the banks face intense competition in the global market.
Banks are in need to apply for morality, sustainability, and responsibility to their business model,
business strategy, and formulation for goods and services, operations, and financing activities and
become stronger. Adopting the environmental factors in their banking activities, banks can recover
the return from their investments and make the polluting industries become environment-friendly.
References and Bibliography

 dec182011gse1. (n.d.). Retrieved from

https://www.scribd.com/document/87947951/dec182011gse1

 Green Banking: Page. (n.d.). Retrieved from

https://www.scribd.com/document/384952125/green-banking

 Green Banking: All You Need to Know. (2017, February 18). Retrieved from

https://www.bankexamstoday.com/2017/02/green-banking-all-you-need-to-know.html