• Wednesday, Nov 14, 2018
  • Last Update : 07:35 pm

Banks, FIs urged to finance only green projects

  • Published at 07:26 pm May 27th, 2014

Bangladesh Bank Governor Dr Atiur Rahman has suggested banks and financial institutions (FIs) not to finance any venture that can harm the nature, saying that financing green and environment-friendly ventures can facilitate Bangladesh clean its environment.

“We’ve to keep the nature unharmed for our existence and, banks and FIs should not finance any venture that will harm the nature … they need to be careful that their finance is not used to fell trees and fill up ponds, rivers and canals,” he told the opening session of “Green Bankers’ Conference 2014” in Dhaka yesterday.

Deputy Governor S. K. Sur Chowdhury, Country Manager of International Finance Corporation (IFC) Bangladesh Kyle Kelhofer, Professor Saiful Haque of Institute of Energy, Dhaka University and BB’s Executive Directors M. Mahfuzur Rahman and Ataur Rahman also spoke at the session.

Atiur said the central bank has created refinancing windows to promote banks and FIs in financing green and environment-friendly ventures.

“We’re committed to practice digital, nearly paperless, sustainable, green banking operations by making the best use of the information technology and related professional skills,” he said.

The governor said BB’s different initiatives particularly IT-based green banking activities through online banking, e-banking, e-commerce, online CIB, automated clearing house, e-tendering, e-recruitment are moving ahead in full swing. “We’re now thinking to introduce e-noting.”

He said the central bank is heading the banks and financial institutions to a new horizon of green banking, where six green products were offered for refinancing initially, 44 green products are now open under BB refinancing scheme in 2014.

“And good news is, an avenue has been opened for innovation and research … if any bank or FI comes up with innovative green product that truly contributes in environmental conservation, BB will seriously study that for further decision,” he added.

BB will also try to enhance the size of its refinance scheme to facilitate large scale investments in green alternatives, he said, adding that in addition, the FIs should take initiatives to attract green bonds, green private equities for enhancing sustainable financing.

About the challenges, Atiur said all banks have their general credit policy for the lending sectors but the nature of different sectors varies from the environmental perspective. For example, he said polluting industries like tannery differs from the investment in poultry. So preparing sector-specific environmental policy guideline for banks is a big challenge, he added.