Green Banking Practices in Bangladesh:

Private Banking Sector"

Report
On

Green banking Practices in Bangladesh:

Private Banking Sector"
Submitted to:
Prof. Md. Nazrul Islam
Professor & Dean
Faculty of Business
ASA University Bangladesh

Submitted by:
Md. Mizanur Rahman
ID: 12-1-12-0020
Batch: 15th
Program: BBA

Submission Date: December 26, 2015

ASA University Bangladesh (ASAUB)

Letter of Transmittal

December 26, 2015

Prof. Md. Nazrul Islam
Professor & Dean
Department of Business Administration
ASA University Bangladesh (ASAUB)

Subject: Submission of Project Paper.

Dear Sir,
It is a great pleasure for me that I am going to submit my report on Green banking Practices in
Bangladesh: Private Banking Sector. Based on this, I tried to incorporate theories taught
with corporate notions. It will give a total overview of Green Banking & its related issues.
I have tried to include all the practical aspects of operation based on Green Banking
practices in Bangladesh private banking sector & a notion how it is going on under real
situation.
My attempt is to relate the practical issues to the theories taught backed by my supervisor proper
guidance. I have tried heart and soul to make the report as comprehensive as possible. I hope that
you will approve the report and it will meet standards.
In this regard, special gratitude goes to you for forwarding your helping hand time to time.

Sincerely Yours
Md. Mizanur Rahman
ID: 12-1-12-0020

(iii)

Certificate

This is to certify that the Dissertation entitled Green Banking Practices in Bangladesh:
Private Banking Sector is a bonafide record of independent research work done by Md.
Mizanur Rahman (ID: 12-1-12-0020) under my supervision Prof. Md. Nazrul Islam and
submitted with report of Business Administration, ASA University Bangladesh (ASAUB) in
partial fulfillment for the award of the Degree of Bachelor of Business Administration in 2015.
The dissertation is an original one.
I wish his success in life.

Prof. Md. Nazrul Islam

Professor & Dean
Department of Business Administration
ASA University Bangladesh (ASAUB)

(iv)
Acknowledgement

Praise is to Allah, for giving me the opportunity to be a student of a prestigious department of

Business Administration. I would like to thank my supervisor Prof. Md. Nazrul Islam my
favorite, honorable teacher of the department for giving me the chance to work on such a
tremendously nice topic.
I have prepared this report as an integral part of BBA program under the faculty of business
Administration, ASA University Bangladesh (ASAUB).
I am very grateful to all the teachers in the department of Business Administration for this
cooperation.
I therefore request every reader of this report to furnish me any mistake so that further action for
improvement can be taken.

(v)

Executive Summary
Sustainable development can be achieved by allowing markets to work within an appropriate
framework of cost efficient regulations and economic instructions. One of the major economic
agents influencing overall industrial activity and economic growth is the financial institutions
such as banking sector. In a globalised economy, the industries and firms are vulnerable to
stringent environmental policies, severe law suits or consumer boycotts. Since banking sector is
one of the major stake holders in the industrial sector, it can find itself faced with credit risk and
liability risk. Further, environmental impact might affect the quality of assets and also rate of
return of bank in the long run. Thus the bank should go green and play a proactive role to take
environmental and ecological aspects as part of their lending principal, which would force
industries to go for mandated investment for environmental management, use of appropriate
technologies and management system. This report explores the importance of Green Banking in
Bangladesh private banking sector, sites international experiences and highlights important
lesson for sustainable banking and development in Bangladesh. Therefore I suggest possible
policy measure and initiative to promote green banking in Bangladesh.

(vi)

Table of Contents
Sl.No.

Particulars

Page. No.

Title Fly

Title Page

ii

Letter of Transmittal

iii

Certificate

iv

Acknowledgement

Executive Summary

vi
Chapter 1: Introduction

1-6

1.1

Introduction

1-4

1.2

Objectives of Green Banking

1.3

Limitations of the study

1.4

Research Method

Chapter 2: Green Banking Practices in Bangladesh

7-16

2.1

Comments of experts about Green Banking

7-8

2.2

Evolution of Green Banking

8-9

2.3

Importance of Green Banking

2.4

Draft Guideline of Green Banking in Bangladesh

9-11

2.5

Green Banking In Bangladesh

11

2.6

Roles of Green Banking

11-13

2.7

Green Banking Practices

13-14

2.8

Green Banking Products and Services

14-15

2.9

Prospects of Green Banking

16

Chapter 3: Bangladesh Bank Policy Guidelines for Green Banking

3.1

Bangladesh Bank's Earlier Initiatives

17-24
17-18

3.2

Adopting Green Banking Policy

18

3.3

Phase-I

19-21

3.3.1

Policy Formulation and Governance

19

3.3.2

Incorporation of Environmental Risk in CRM

19

3.3.3

Initiating In-house Environment Management

20

3.3.4

Introducing Green finance

20

3.3.5

Creation of Climate Risk Fund

20

3.3.6

Introducing Green Marketing

21

3.3.7

Online Banking

21

3.3.8

Supporting Employee Training, Consumer Awareness and

21

3.3.9

Green Event
Disclosure and Reporting of Green Banking Activities

21

3.4

22-23

Phase-II

3.4.1

Sector Specific Environmental Policies

22

3.4.2

Green Strategic Planning

22

3.4.3

Setting up Green Branches

22

3.4.4

Improved In-house Environment Management

22-23

3.4.5

Formulation of Bank Specific Environmental Risk

23

3.4.6

Management Plan and Guidelines

Rigorous Programs to Educate Clients

23

3.4.7

Disclosure and Reporting of Green Banking Activities

23

3.5

23-24

Phase-III

3.5.1

Designing and Introducing Innovative Products

24

3.5.2

Reporting in Standard Format with External Verification

24

3.6

Reporting Green Banking Practices on Quarterly Basis

Chapter 4: Jamuna Bank Limited Green Banking

24
25-33

4.1

About Jamuna Bank Limited

25-26

4.2

Vision

27

4.3

Mission

27

4.4

Jamuna Bank Green Banking Policy

27-28

4.5

Jamuna Bank Green Banking Implementation

29-31

4.6

Jamuna Bank Green Banking Practices

31-33

Chapter 5: Others Banks Green Banking Practices

5.1

United Commercial Bank limited

34-62

34-38

5.1.1

Background

37

5.1.2

Green Banking

37

5.1.3

Purpose

37

5.1.4

Scope

37

5.1.5

Benefits

37-38

5.1.6

Implementation

38

5.2

Governance and Initial In-house Environment Management

38-41

5.2.1

Phase I

38

5.2.2

Policy formulation and Governance

38

5.2.3

Incorporation of Environment Risk in CRM

39

5.2.4

Initiating In-house Environment Management

39-40

5.2.5

Introducing Green Finance

40

5.2.6

Creation of Climate Risk Fund

40

5.2.7

Introducing Green Marketing

40-41

5.2.8

Online banking

41

5.2.9

Employee Training, Consumer Awareness and Green Event

41

5.2.10

Disclosure and Reporting Green Banking Activities

41

5.3

Sector-specific Policies and Strategic Planning

41-43

5.3.1

Phase II

41

5.3.2

Sector specific environmental policies

42

5.3.3

Green Strategic Planning

42

5.3.4

Setting up Green Branches

42

5.3.5

Improved In-house Environment Management

43

5.3.6

Bank specific Environmental Risk Management Plan

43

5.3.7

Guidelines
Educating the clients

43

5.3.8

Disclosure and reporting of Green banking activities

43

5.4

Green Product and Standard Report

44-44

5.4.1

Phase III

44

5.4.2

Designing and introducing innovative products

44

5.4.3

Reporting in standard format with external verification

44

5.4.4

Reporting Green Banking Practices to Bangladesh Bank

44

5.5

Amendment and Compliance

44-45

5.5.1

Amendment of the Policy

44

5.5.2

Compliance

44-45

5.6
5.6.1

BASIC Bank Limited

Objectives of the policy

45-52
46

5.6.2

Covenants of the Policy

46-47

5.6.3

Policy formulation and governance

47

5.6.4

Introducing Green Finance

47-48

5.6.5

Creation of Climate Risk Fund

48

5.6.6

Introducing Green Marketing

48

5.6.7

Ensuring all out Online Banking practices

48

5.6.8

Use of appropriate technologies

49

5.6.9

Supporting employee training, Consumer Awareness and

49

5.6.10

Green Event
Sector specific Environmental Policies

49-50

5.6.11

Pricing Strategy

50

5.6.12

Green strategic planning

50

5.6.13

Setting up Green Branches

50-51

5.6.14

Incorporation of Environmental Risk Management plan and

51

5.6.15

guidelines
Initiation of Programs for educating clients

51

5.6.16

Disclosure and reporting of Green banking activities

51

5.6.17

Designing and introducing innovative products

51

5.6.18

Eco Landscaping

52

5.6.19

Reporting in Standard Format with External verification

52

5.6.20

Provision for co-opting intermediary regulations/guidelines

52

5.7

Dhaka Bank Limited

52-56

5.7.1

Green Banking

53

5.7.2

Importance of Green Banking

54-56

5.8

Dutch Bangla Bank Limited

56-62

5.8.1

DBBL & Green Banking

56-58

5.8.2

Environment and pollution

58-59

5.8.3

Urge to step ahead

59-60

5.8.4

Need for a Green banking practices

60

5.8.5

Bangladesh Bank Directives

60-62

Chapter 6: Recommendations
6

63-65

Recommendations
Chapter 7: Conclusion

63-65

66-67

Conclusion

66-67

References

68