Tuesday 12 June 2012

Essay on Green Banking

Essay on  Green Banking

Commercial banks will have to accept a comprehensive green banking policy by December 2013 as part of the central bank's efforts to create banking practices more accountable to social and environmental causes.
Bangladesh Bank (BB) will give points to compliant banks on management component while deciding on its CAMELS (capital, asset, management, earning, liquidity and sensitivity) rating.
The central bank will name top ten banks for their overall performances in green banking, and will take into account green banking of a financial institution to give it authorization to open new branches.
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 first quarterly report has to be submitted by July 15.
Besides avoiding negative impacts on environment through banking activities, the banks are expected to introduce environment friendly green products to address the core ecological challenges of the country.
The central bank said the banks hold an exclusive position in an economic system that can affect production, business and other economic activities through their financing activities and thus may contribute to polluting environment.
In line with global development and response to the environmental degradation, the country's financial sector should play important roles as one of the key stakeholders, the central bank said, adding that the state of environment in Bangladesh is rapidly deteriorating.
It said the environmentally responsible banks do not only improve their own standards but also affect socially responsible behaviour of other businesses.
The commercial banks will now require taking measures to protect environmental pollution while financing a new project or providing working capital.

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