Ten banks and five non-banking financial institutions (NBFIs) were certified on the basis of certain criteria, in Bangladesh Bank's "Sustainability Rating 2021."
This is the second time that Bangladesh Bank has released this rating.
Four banks that were ranked last year have been dropped from this year's rating, the same for three NBFIs.
Banks in the top 10 list of the 2021 Sustainable Rating were Bank Asia, Brac Bank, Dutch-Bangla Bank, Eastern Bank, Exim Bank, Islami Bank Bangladesh, NRB Bank, Pubali Bank, Southeast Bank and The City Bank.
On the other hand, top five NBFIs included Agrani SME Financing, Bangladesh Finance and Investment, Bangladesh Infrastructure Finance Fund Limited (BIFFL), IDLC Finance and IPDC Finance.
According to a Bangladesh bank statement issued on Wednesday, the four indicators on which the rating was based were sustainable finance indicator, green refinance, social responsibility program (CSR) and core banking sustainability.
Selim RF Hussain, managing director and CEO of Brac Bank, said that since its inception, their bank has always committed to the value based financing model where sustainability and profitability are blended together to make a bigger socio-economic impact.
"Over the period of our 20 years journey, we learnt, we adopted and then adhered to all 3 core principles of sustainability: people, planet and prosperity as our company mission statement. Today, Brac Bank is breaking the barrier from traditional financing and channeling impact based financing to achieving the 17 UN SDGs of our country," he also said.
"As one of the founding members of the Global Alliance for Banking on Values, we are utilizing 360 degree banking services to deliver sustainable economic, social and environmental development. Our corporate social initiatives are also focused heavily on programs that have a lasting impact on the environment, society and its people," Hussain further commented.
"On the principle of sustainability, Brac Bank strives to use the guiding principles of Bangladesh Bank and set sustainable development priorities on our future strategy. We are honored that Bangladesh Bank has named us one of the Top Ten Sustainable Banks for 2021," he added.
Executive director and spokesperson of Bangladesh Bank Md Serajul Islam said that the list of top 10 banks in the sustainability rating was published to motivate the banks to uphold good governance, integrity and social responsibility.
Asked about the indicators and the views of some departments of the central bank in compiling the list, he told Dhaka Tribune: “Sustainability ratings are based on a number of indicators, including CSR spending, green finance, core banking activities and default rate.”
The rating has been prepared in collaboration with various departments of Bangladesh Bank including Banking Regulation and Policy Department, Department of Off-Site Supervision, Financial Institutions Inspection Department, he further described.
Hopefully, this rating will inspire the establishment of integrity and good governance in the activities of banks and financial institutions. In addition, CSR will play a more pioneering role in spending and green finance, Islam added.
However, in 2020, a circular was issued by the Sustainable Finance Department of Bangladesh Bank for all scheduled banks and NBFIs in the country.
In that circular, they referred to the sustainability ratings based on the Sustainable Finance Policy Guidelines and the Sustainable Development Goals (SDGs.)
The names of the top 10 banks and five NBFIs in the Sustainable Rating-2020 were announced for the first time in August last year, in light of the circular.
The banks on the 2020 list included Al-Arafah Islami Bank, Bank Asia, Brac Bank, Dutch-Bangla Bank Limited, Exim Bank, Islami Bank Bangladesh, Mutual Trust Bank, Prime Bank, The City Bank, and United Commercial Bank.
The 2020 rated NBFIs were Hajj Finance Company, IDLC Finance, IPDC Finance, Saudi Bangladesh Industrial and Agricultural Investment Company (Sabinco) and United Finance.