The word “Green” means a broad range of social, environmental and ethical dimension. Green banking means eco-friendly banking system which comes in different forms to ensure sustainable development. Green banking is also known as ethical/social/sustainable banking. Actually green banking is a complementary of social corporate responsibility. The different forms of green banking are using online banking instead of branch banking, paying bills online instead of mailing them, purchasing green mortgages, reducing paper usage, granting loans to eco-friendly enterprises etc.
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Green banking is a social/ethical banking activity as there is a strong relation between green banking and ethical banking/corporate social responsibility (CSR). The concept of CSR is that all the activities of a business will be run considering the impacts of those activities on the social as whole. Moreover green banking is considered as a sustainable banking as it considers the environment factor which is a prerequisite of sustainable development. By proving safeguards’ to the environmental degradation green banking ensures sustainable economic growth over the years.
Bank’s involvement with social banking is not a new phenomenon but in 1990s a clear movement has emerged regarding this issue. During 2000s the movement got popularity and people started to understand the importance of this issue and started to implement it in their activities. First green bank which was based on Eustis and Clermont Florida USA is the first initiative in this world to promote social and environmental along with providing the general banking services to their client effectively. In Bangladesh the concept of green banking was initiated by Bangladesh bank in 2011.
The concept is green banking is new. This concept was developed by western countries. With the view of protecting environment in 2003 green banking activities started. Later equator principles were lunched and primarily adopted by banks named Citigroup Inc. Westpac banking corporation, The Royal bank of Scotland. In USA congressman chirs Van Hollen introduced a green bank act with the view of establishing a green bank in us under the finance of government. At the initial stage of green banking focus was only on reducing use of paper because paper ultimately comes from trees so if the use of papers can be reduced, forest will be saved and environment will be saved. Later green banking was introduced in business practice of banks too.
Beginning of green banking in Bangladesh is a very new thing. In 2011 Bangladesh Bank first has developed green banking regulation in BD. Bangladesh bank is the first central bank to take step for green banking in this world.
Paper less Banking:
Developing energy- consciousness, adopting effective office time management and automation solutions and using compact fluorescent lighting (CFL) can help banks save energy consumption considerably. Banks can conduct energy audits in all their offices for effective energymanagement. They can also switch over to renewable energy (solar, wind, etc.) to manage their offices and ATMs racy. Banks need to encourage client to use online facility.
Using mass transportation system instead of personal transportation system will cost less energy and less carbon emission. This will eventually protect environment pollution.
Financing energy efficient houses or invests in green power. In general, green mortgages, or energy-efficient mortgages (EEMs), provide retail customers with considerably lower interest rates than market rates for clients who purchase new energy efficient homes or invest in retrofits, energy-efficient appliances or green power.
Online banking means performing banking activities sitting in anywhere in the world without going to bank office Online banking includes internet banking, mobile banking, ATM facilities etc.
Green financing means financing those projects which are eco-friendly. If banks finance at lower interest rate and less complex procedures, the entrepreneur will cling to start and expand those business which are eco-friendly.
Attractive loan arrangement for green commercial building is characterized by lower energy consumption of approximately 15-to-25 percent, with reduced waste and less pollution than traditional buildings, projects demonstrating innovations in water, air, energy and waste management.
It is designed to promote consumer adoption of home solar electric systems. In designing and offering these incentive-based products, a number of banks have also partnered with technology providers and environmental non-governmental organizations (NGOs).
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