Green Banking
BB asks NBFIs to frame polices by June ’14
Bangladesh Bank on Sunday published a set of policy guidelines on green banking for non-bank financial institutions with a view to establishing green banking practice in the country.
To this end, the BB issued a circular to managing directors and chief executive officers of all NBFIs asking them to frame green banking polices within June 30, 2014.The central bank in the circular said it was high time for the NBFIs to adopt a comprehensive green banking policy in a formal and structured manner in line with the global norms as Bangladesh was one of the countries that were most vulnerable to the impacts of climate change.
In line with the global development and response to environmental degradation, the country’s financial sector should play an important role, the circular said.
The BB set a course of action for the NBFIs in three separated phases and set deadlines to implement the green banking policies.
In the first phase, the NBFIs will have to develop green banking policies and show general commitment to environment through in-house performance. The timeline for actions to be taken under this phase should not exceed June 30, 2014.
The NBFIs will have to formulate and adopt broad environmental or green banking policy and strategy approved by their board of directors within the timeframe for the first phase. A high powered committee comprising directors from the board should be responsible to review the NBFIs’ environmental policies, strategies and programme.
Under the first phase, the NBFIs will have to approve a considerable fund in their annual budget allocation for green banking. The NBFIs are required to establish a separate green banking unit or cell having the responsibility of designing, evaluating and administering related green banking issues of the NBFIs.
The NBFIs will have to prepare an inventory of the consumption of water, paper, electricity, energy with its offices and branches in different places, after which it should take measures to save electricity, water and paper consumption. A ‘Green Office Guide’ or at least a set of general instructions should be circulated to the employees for efficient use of electricity, water, paper and reuse of equipment.
In the second phase, the NBFIs will have to formulate strategies to design specific policies for different environmental sensitive sectors, such as agriculture, agri-business (poultry and dairy), agro farming, leather (tannery), fisheries, textile and apparels and renewable energy.
The timeline for the actions to be taken under this phase should not exceed December 31, 2014.
A system of environmental management should be in place in a NBFI before the initiation of the activities of the third phase is expected to address the whole eco-system through environment-friendly initiatives and introducing innovative products.
Standard environmental reporting with external verification should be part of the third phase. The timeline for the actions to be taken under this phase should not exceed June 30, 2015.
The NBFIs will have to report on their initiatives and practices regarding the green banking activities to the green banking and CSR department of the BB in specified format on quarterly basis and disclose in their respective websites. The NBFIs have to submit the report within the next 15 days of each quarter.
The BB formulated another policy guideline for green banking for the scheduled banks on February 27, 2011.
-With New Age input
