REPORT TOPIC

‘Sustainable banking adaptation in PCBs of Bangladesh’

Submitted to,
Dr. Mohammad Baktiar Rana
Associate Professor
IBA-JU

Submitted by,
S.M. Aminul Haque
Batch: 24
ID-2276
IBA-JU

Date: 16 March, 2019

 REPORT TOPIC

‘AN EVALUATION OF COMMERCIAL BANKS IN SUSTAINABLE

BANKING ADOPTION: A BANGLADESH PERSPECTIVE’

The present era of industrialization and globalization has added a lot of comfort
and luxury to human life but has also lead to an alarming situation of huge
environmental degradation incorporated with all the involved activities. Today, the
entire sector in the world economy is facing huge challenge to deal with the
environmental problems and their related impacts in their day to day businesses. In
this context the financial sector and especially the banks can play an important role
in promoting environmental sustainability that derives from Sustainable finance.
Sustainable finance refers to any form of financial service integrating
environmental, social and governance (ESG) criteria into the business or
investment decisions for the lasting benefit of both clients and society at large. To
meet ‘Sustainable finance’ goal, one of the seventeen goals of SDGs; ‘Bangladesh
Bank’ was the first central bank in the world that has adopted and implemented
that policy. Subsequently, ‘Sustainable Finance Department’ was established by
Bangladesh Bank on July 23, 2015 upon extinguishing the previous Green Banking
and CSR Department.The goal of Sustainable finance department is to provide
Sustainable Banking through various types of banks and FIs in the country.
Sustainable Banking is an approach that creates long-term resilient and sustainable
economic, social and environmental values having a green, responsible and
inclusive strategy through transparent and efficient utilization of resources. This
approach is based on certain principles that not only consider profit but also
economic and social benefits. The main objective of sustainable banking is to
maintain financial and social stability. Bangladesh Bank vide SFD Circular No. 02,
dated December 01, 2016 instructed all banks and FIs to establish Sustainable
Finance Unit and Sustainable Finance Committee by abolishing both Green
Banking and CSR units. In our country, there are 55 different types of commercial
banks (SOCBs, PCBs and FCBs).The Central bank alone can’t establish
Sustainable banking throughout the country hence the proactive participation of
commercial banks is much-needed for adopting Sustainable Banking framework as
commercial banks are the integral part of the financial system.
 The broad objective of this report is to evaluate the sustainable banking
progress of PCBs in Bangladesh.To attain the main objective, the study
considers the following specific objectives in particular:
 To look at the Green banking parameters.
 To look at the CSR parameters.
 To look at the Financial inclusion parameters.

This report will analyze whether all commercial banks are meeting the benchmark
set by the central bank i.e. maintaining the policies and taking appropriate
sustainable initiatives in terms of both in-house environment management,
conducting green financing and CSR activities. This report will further try to
evaluate the performance (lending and investments practices) of the commercial
banks in green products, better performer among the types of the commercial
banks (SOCBs, PCBs and FCBs) and the rationale behind that, to forecast the
future prospect of the sustainable banking practices through trend analysis, to
illustrate the shortcomings of the existing practices and to provide with some
recommendations to make the situation better off.

Data analysis:
Green Banking:
 Budget allocation and utilization
 In-house environment management
 ERR information
 Green finance
 Climate risk fund
 Online, Internet and SMS Banking
 ATM services by banks
 Branches/SME/ATM units powered by solar energy
 Green Transformation fund (GTF)
 Training, promotion and disclosure
CSR:
  CSR expenditures conducted by the banks under 8 categories
Financial inclusion:
 School Banking.
 No-Frill accounts for the farmers and under-privileged group of the society
 Banking for working/school children
 Agent Banking
 BB Refinance scheme for BDT 10 Accounts