Green Banking Practices of Shahjalal Islami Bank Limited

The main objective of the report is to identify the green banking activities practiced by Shahjalal Islami Bank Limited. Other objectives are to draw a clear picture of Green Banking and identify the major areas and product of Green Banking. Here also analysis Shahjalal Islami Bank Green Banking policy and implementation. Finally investigate the Green Banking policy that adapted by Mirpur Branch and give recommendation on the basis of Finding.

Objectives of the study

The main objective of the report is to identify the green banking activities practiced by SJIBL, which includes the following specific objectives

Specific Objectives:

The specific objectives of this report are

1. To draw a clear picture of Green Banking.
2. To identify the major areas and product of Green Banking.
3. To examine SJIBL Green Banking policy and implementation.
4. To investigate the Green Banking policy that adapted by Mirpur Branch.
5. To give recommendation on the basis of Finding.

General Objectives:

The general objective of the report is to analyze the “Green Banking of SJIB”.

Methodology

Methodology is the study or theoretical analysis of particular working methods. Adoption of methodology is an important factor in performing any study. If the methodology of the study is properly adopted and the study runs properly according to the methodology, the study is supposed to be successful. The following represents the methodology of the study.

Methods of Data Collection

Conceptualization:

Conceptualization is the way of developing concepts about the  topic and  its related matter. The study follows a procedural approach in order to get complete picture of concentration of different banks initiatives to green banking in worldwide and in Bangladesh especially Shahjalal Islami Bank limited.

Theoretical Framework

The theoretical framework is focused on the insight of the current process  and techniques in related to practice green banking to get sustainability. It emphasizes the green banking policy, green banking strategies, green products and probable key opportunities of the products. And their inter relationship with making the environment green.

Sources of Data

In order to make the report more meaningful and presentable, data is collected from many sources. The data collection sources can be accumulated two sources. Majority of the information was collected from secondary sources.

Primary sources

The “primary sources” are as follows-

1. Officers
2. Supervisor
3. Clients

Secondary Sources

The “Secondary Sources” of data and information are:

1. Annual Report (Last five years) of Shahjalal Islami Bank Limited.
2. Periodicals published by Bangladesh Bank.
3. Various books, articles, compilations etc. regarding green banking functions, and the policies.
4. Relevant file study as provided by the officers concerned.

Method of data collection:

1. Face-to-face conversation with the respective officers and staffs of the Branch.
2. Informal conversation with the investment clients.
3. Practical work exposures form the different desks of the four departments of the Branch covered.

Data Processing and Analysis:

Collected data and information both from primary and secondary sources were analyzed. Raw data  collection from survey and edited and then classified according to the objectives. I have used some techniques for the purpose of analysis. These are:

• Theoretical analysis
• Graphical analysis
• Tabular analysis

Organizatinal Overview

Background of the organization

Shahjalal Islami Bank Limited (SJIBL) commenced its commercial operation in accordance with principle of Islamic Shariah on the 10th May 2001 under the Bank Companies Act, 1991. During last eight years SJIBL has diversified its service coverage by opening new branches at different strategically important locations across the country offering various service products both investment & deposit. Islamic Banking, in essence, is not only INTEREST-FREE banking business, it carries deal wise business product thereby generating real income and thus boosting GDP of the economy. Board of Directors enjoys high credential in the business arena of the country, Management Team is strong and supportive equipped with excellent professional knowledge under leadership of a veteran Banker Mr. Muhammad Ali. Name of the Company Shahjalal Islami Bank Limited Legal Form A public limited company incorporated in Bangladesh on 1st April 2001 under the companies Act 1994 and listed in Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited. Commencement of Business 10th May 2001.

SJIBL’s Vision

To be the unique modern Islami Bank in Bangladesh and to make significant contribution to the national economy and enhance customers’ trust & wealth, quality investment, employees’ value and rapid growth in shareholders’ equity.

SJIBL’s Mission

• To provide quality services to customers.
• To set high standards of integrity.
• To make quality investment.
• To ensure sustainable growth in business.
• To ensure maximization of Shareholders’ wealth.
• To extend our customers innovative services acquiring state-of-the-art technology blended with Islamic principles.
• To ensure human resource development to meet the challenges of the time.

SJIBL’s Strategies

• To strive for customers best satisfaction & earn their confidence.
• To manage & operate the Bank in the most effective manner.
• To identify customer’s needs & monitor their perception towards meeting those requirements.
• To train & develop all employees & provide them adequate resources so that the customer’s needs are reasonably addressed.
• To promote organizational efficiency by communicating company plans, polices & procedures openly to the employees in a timely fashion.
• To cultivate a congenial working environment.
• To diversify portfolio both the retail & wholesale markets.

Shariah Council

Shariah Council of the Bank is playing a vital role in guiding and supervising the implementation and compliance of Islamic Shariah principles in all activities of the Bank since its very inception. The Council, which enjoys a high status in the structure of the Bank, consists of prominent ulema, reputed banker, renowned lawyer and eminent economist. Members of the Shariah Council meet frequently and deliberate on different issues confronting the Bank on Shariah matters. They also conduct Shariah inspection of branches regularly so as to ensure that the Shariah principles are implemented and complied with meticulously by the branches of the Bank.

SJIBL’s Deposit Schemes

• Mudaraba Monthly Income
• Mudaraba Double Money
• Mudaraba Monthly Deposit
• Mudaraba Millionaire
• Mudaraba Haji Deposit
• Mudaraba Housing Deposit
• Mudaraba Small Business
• Mudaraba Cash Waqf Deposit
• Mudaraba Lakhopoti Deposit
• Mudaraba Bibaho Deposit
• Mudaraba Mohorana Deposit
• Mudaraba Shikhkha Deposit

Account services

• Al Wadiah Current Deposits (ACD)
• Mudaraba Saving Deposits (MSD)
• Mudaraba Term Deposits (MTD)
• Mudaraba Short Notice Deposits (MSND)

FINANCIAL highlights of the Bank (Amount in millions)

Green Banking

WHAT IS GREEN BANKING

Green Bank means

• An ethical bank
• A socially responsible bank
• A sustainable bank.

Green Banking is to support:

• Innovative green products
• Activities those are not hazardous to environment and help conserve environment.

WHY GREEN BANKING

• To help safeguard the planet from
• unusual weather pattern;
• rising greenhouse gas;
• Declining air quality.

• For ensuring green economic growth: economic growth which is sustainable.
• To meet one of the Millennium Development Goals: Ensure Environmental Sustainability.

DEFINITIONS OF GREEN BANKING

IN GENERAL focus

Green Banking is like a normal bank’ which considers the entire social and environmental factors; it is also called as an ethical bank’ Ethical banks have started with the aim of protecting the environment.

The Broad focus

Green banking refers to the efforts of the Banking sector to keep the environment green and to minimize greenhouse effects through rationalizing their strategies, policy, decisions and activities pertaining to banking service, business and in-house operational activities. Green banking may be seen as a component of the global initiative from Banks end to save environment. Green banks or environmentally responsible banks do not only improve their own standards but also affect socially responsible behavior of other business. Green banking can benefit the environment either by reducing the carbon footprint of consumers or banks. Green banking means combining operational improvements and technology, and changing client habits.

The definitions derived from specialists:

• Sherman stresses (Key Differentiator of Green Choice Bank, Chicago):

“With green banking,  what sets  leaders  apart  from the rest is…how you invest  back in the community,  so we are  trying  to develop  loan products  and  deposit products that reward  good environmental  choices”.

• Justin Pritchard (columnist, about com): “Green Bank is a bank focusing on sustainability. It is bank like others but they are to claim the “green banking” niche, and they hope to excel by serving companies and individuals interested in green business. For the most part, the bank will work with businesses that find ways to do more and use less”.

GREEN BANKING & SUSTAINABLE GROWTH

Sustainable development meets the need of present generation without compromising the ability of future generation to meet their own needs. The key to sustainable development is to ensure broad-based inclusive economic growth, with:

• Promotion of natural resources;
• Preservation of regenerating capacity of ecological system;
• Avoidance of environmental risks on future generations.

Banking sector can play an intermediary role between economic development and environmental protection.

IDEAL BENEFITS OF GREEN BANKING

• Basically Ethical (Green) banking avoids as much paper work as possible and rely on online/electronic transactions for processing so that you get green credit cards and green mortgages. Less paperwork means less cutting of trees.
• Creating awareness to business people about environmental and social responsibility enabling them to do a environmental friendly business practice.
• Green (Ethical) banks adopt and implement environmental standards for lending, which is really a proactive idea that would enable eco-friendly business practices which would benefit our future generations.
• When you are awarded with a loan, the interest of that loan is comparatively less with normal banks because ethical banks give more importance to environmental friendly factors – ecological gains. Natural resources conservation is also one of the underlying principles in a green bank while assessing capital/operating loans to extracting/industrial business sector.

GREEN BANKING PRODUCTS

Until a few years ago, most traditional banks did not practice green banking or actively seek investment opportunities in environmentally-friendly sectors or businesses. Only recently have these strategies become more prevalent, not only among smaller alternative and cooperative banks, but also among diversified financial service providers, asset management firms and insurance companies. Although these companies may differ with regard to their stated motivations for increasing green products and services (e.g. to enhance long-term growth prospects, or sustainability principles on which a firm is based), the growth, variation and innovation behind such developments indicate that we are in the midst of a promising drive towards integrating green financial products into mainstream banking.

This product and service review is divided into the following banking sectors:

• Retail Banking
• Corporate & Investment Banking
• Asset Management
• Insurance

Green Banking and Bangladesh Banking Industry:

The  climate  of  Bangladesh  has  already  been  exposed  to  global  warming  due  to  environmental pollution  followed  by  climate  degradation  although  she  can’t be accused  to  be  responsible  for these issues. However, the climate of the country is rapidly deteriorating due to recklessness of her citizens and inefficient & ineffective use of natural/semi-natural/manufactured/processed/ transformed resources.  Natural disasters like cyclone, flood, draught and earthquake become very frequent.  As  such,  state  of  environment  in  Bangladesh  needs  proper  attention  and  up-gradation for ensuring a better future for our successors. In  response  to  increasing  awareness  over  climate  change,  environmental  degradation,  urgent measures for sustainable development have been addressed by some of the stake holders all over the  world.  Banking  system  hold  a  unique  position  in  an  economy  that  can  affect  production, business  and  other  economic  activities  through  their  procedure  for  financing  activities  which would in turn contribute to protect environment/climate from pollution. Moreover, efficiency in energy  use,  water  consumption  and  waste  reduction  may  significantly  contribute  for  operating cost of many of the large banks of the country.

Projects/Businesses those include waste prevention and resource efficiency systems  in  a wide range of sectors including community, commercial and business organizations – such as shopping centers, regional airports, hospitals, construction,  farms,  a  university, public organizations, and educational organizations are receiving enhanced attention these days.

The  growing  financial  sector  especially  banks  in  Bangladesh  can  play  key  role  as  one of the important stake-holders of the economy enforcing the businessmen/industrialists of the country to design their strategy/action plan keeping in mind the vital environmental issues.

BANKS CAN PLAY MAJOR ROLE IN

• Embracing and offering environment friendly online banking products. E.g. Mobile banking; online banking.
• Providing incentives to customers to use green products. g. Green credit cards, Green savings accounts, Green checking accounts Incorporating climate change issues into lending and investment decisions
• To promote sustainable environment friendly initiatives undertaking through adoption of a set of principles and strict adherence to those principles.
• To contribute to  the  national/global  interest  through  avoidance  of  financing  in specific industry(ies)/project(s)/process(es)/business(es), being harmful or tend to be causing harm to the environment even if they are financially viable;
• To create an atmosphere for the bank and/or its both existing and potential clients to work within  an  ideal  business  environment  through  innovative  marketing  of innovative banking products;
• To encourage the  employees,  the  existing  and  potential  clients  and  other stakeholders to develop, practice & promote for developing & using Environment friendly /Green Technology/products/production process
• To develop the  attitude  among  the  employees  to  motivate,  encourage  the stakeholders  through  initialization  of  appropriate  in-house  environmental  risk management system through introduction of appropriate technology;
• To sponsor awareness programs  for  environment  friendly  products/technology through practice of Corporate Social Responsibilities (CSR).

GREEN BANKING POLICY OF BANGLADESH BANK

The broad objectives of the Banks are using their resources with responsibility to grow- trade, commerce, service, industry, income, employment generation, business and other economic activities. A Bank which is socially responsible, environmentally cognizant and follows a path of sustainability with automation and efficiency is called Green Bank.

Bangladesh Bank’s Green Banking Initiatives:

Bangladesh Bank is the only central bank which has issued an indicative guideline for Green Banking.

The guidelines for Green Banking and Environmental Risk Management aim to:

• Ensure environment friendly business practices by banks and financial institutions of the country.
• Incorporate environmental risks into Core Risk Management (CRM).
• Promote sustainable financial and economic growth.

BB advised banks to

• Facilitate clients to open L/Cs for installation of ETP in industrial units; finance Solar Energy, Bio-gas and ETP projects;
• Comply with CSR guidelines for ingraining environmentally and socially responsible practices; comply with the instructions stipulated in Green Banking Policy.

Banks have been brought under the purview of E-Commerce covering

• Payments of utility bills,
• Money transfer and
• Transactions in local currency through internet.

BB launched refinance line of Taka 2.0 billion for financing bio-gas, solar power, effluent treatment plan and Hybrid Hoffman Kiln (HHK) in brick field.

BB’s in-house initiatives:

• BB installed 8 kilowatt solar power system on its rooftop: a move towards to encouraging green banking in Bangladesh.
• Environmentally harmful incineration of non-re-issuable damaged bank notes is being phased out, restoring instead of shredding.
• Steps for measuring carbon footprint of BB’s internal processes and operations are underway.

HOW BANKS WILL BE BENIFITED

• Improved CAMELS rating.
• BB will declare the names of the top 10 banks regarding their overall performance in green banking activities.
• BB will actively consider green banking activities of banks while according permission for opening new branch.
• BB will accord permission for SME branch subject to installation of solar panel in place.
• Separate treatment in existing guidelines of RBCA for Environmental Risks in computation of Adequate Capital by BB.

Bangladesh Bank’s refinance line for renewable energy

• BB has introduced Taka 2.0 billion refinance line for financing solar energy, bio-gas and effluent treatment plant (ETP), at only 5% interest rate.
• BB will provide maximum 100% refinancing facility under this scheme.
• Banks and non-bank financial institutions have already started to access BB’s refinance line.

BB’s refinance line for renewable energy: Disbursement profile

As of June 2011, around Tk. 135.0 million has been disbursed under BB refinance line, of which:

• 15.1 million for Solar Irrigation Pumping Station
• 59.3 million for Solar Home System
• 49.4 million for Biogas
• 10.1 million for Effluent Treatment Plants

Financing of Solar Home System

Table : Bank Disbursement

Source:

• Besides, IDCOL (a NBFI) has installed around 1.2 million Solar Home System till October 2011.
• Solar Irrigation Pumping Station has enabled irrigation in remote, off-grid areas in Bangladesh.
• Mutual Trust Bank (MTBL) has been provided with Taka 3.8 million refinance facility for a project on solar irrigation pumping station in Borguna.
• Besides, MTBL has financed 8 similar projects.

Financing of Bio-gas plants

3 banks have been facilitated with Taka 51.5 million refinance lines for installation of 173 Bio-gas plants. Banks involved with financing Bio-gas plants are:

• Trust Bank
• Mutual Trust Bank
• National Bank.

Financing in Other Projects

• Banks have been provided with Taka 10.7 million refinance line for financing Effluent Treatment Plants. Banks involved are: Prime Bank, Mercantile Bank
• Sonali Bank limited has been provided refinance facility against financing of eco-friendly Hybrid Hoffman Kiln in Rongpur.

Green Banking Activities of Banks

As reported by banks, they are already practicing:

Use of paper on both sides for internal consumption;

• E-statement for customers instead of paper statements;
• Maximum use of day light for office work;
• Use of energy efficient bulbs and other electronic equipments;
• Conversion of Bank’s vehicles (pool) into CNG.

Online Activities:

• Intensive use of online banking and internal communication system to provide better & greater banking services to clients.

Trust Bank

• Experimentally installed Bio-gas plant to generate rural energy with 13 farm families in Manikganj.
• Declared Sreepur as “Bio-gas Palli” under rural SME product Trust-Shufola;
• Spot disbursement of TK. 21.0 million to 65 farm families/rural clients for Bio-gas & Fishery projects.

MTBL

• MTB Centre – based on green energy conscious design.
• Solar Panel on rooftop.
• MTB Green Energy’ to finance renewable energy projects.
• ‘MTB Krishi’, a loan product to finance core sectors of agriculture.
• Solar system powered branches: Ishwardi Branch, Belkuchi Branch‘
• Barguna Model’ -a solar driven irrigation system; 7 other solar irrigation projects.
• Commercial bio-gas plants for power generation.
• Hi-Tech project of 35KW Solar Power Plant in Gazipur.
• Solar system at 909 Union Parishad offices in off-grid areas.

Green Banking Activities of Sjibl

As bankers, waste goes against SJIBL grain, and frugality is a natural tendency. So it just makes sense that Green Bank would lead the way in finding ways to blend SJIBL customers’ financial interests with the interests of the environment. Best of all that environmental sensibility is paying off for SJIBL client – and for the planet.

Vision of GREEN BANKING Of SJIBL

SJIBL vision is to become a preferred provider for business and persona] banking products and services the employer of choice in the markets we serve, the investment preference for investors, and £ champion for a cleaner, healthier green environment.

Mission of GREEN BANKING Of SJIBL

Green Bank is equally committed to all of SJIBL stakeholders – customers, employees, communities and shareholders. We believe each of SJIBL constituencies is best served when all are served. Therefore, SJIBL mission is to:

• Help SJIBL clients achieve economic success and financial security.
• Create a place where SJIBL employees can learn, grow, prosper and be fulfilled in their work.
• Make the communities where we operate better places to live and work.
• Optimize the long-term return to SJIBL shareholders, while providing a safe and sound investment in a socially responsible and resource-efficient enterprise.

Promise of GREEN BANKING Of SJIBL

We are committed to behave in a manner that ensures the fair treatment of SJIBL stakeholders and to be a company that routinely “does the right thing.” We make these promises:

• To behave in an ethical manner in all transactions and interactions.
• To act in environmentally and socially-responsible ways to support and strengthen the communities where we operate.
• To be responsive, accessible and timely.
• Make the communities in which we work better places to live.
• To have proper compliance processes measures and goals for achieving and surpassing all regulatory and legal requirements.

SJIBL’s commitment towards Green Banking will be based on the following broad policies:

• Provide a safe healthful workplace and ensure that personnel are properly trained and have appropriate safety and emergency equipment.
• Participate in efforts to improve environmental protection and understanding and share appropriate pollution prevention technology, knowledge and method.
• Use and encage to use methods that do not adversely affect the environment, including developing and improving products, operations and technologies to minimize waste, prevent air. Water, and other pollution, minimize health and safety risks, and dispose of waste safely and responsibly.
• Ensure that SJIBL make responsible use of energy including conserving energy, improving energy efficiency, and giving preference to renewable over non-renewable energy SJIBL when feasible.

Green Banking

As per BRPD circular No.02 dated 27.02.2011 received from Banking Regulation & Policy Department of Bangladesh Bank, a separate Green Banking Policy Guideline has been adopted in a formal and structured manner in line with global norms so as to protect environmental degradation and ensure sustainable banking practices.

Green Banking Policy will be implemented through time frame work which will be segregated into 3 (three) phases.

Initiating In-house Environment Management

SJIBL shall prepare an inventory of the consumption of water, paper, electricity, energy etc. by its offices and branches in different places. Then it will take measures to save electricity, water and paper consumption. A ‘Green Office Guide’ or at least a set of general instructions will be circulated to the employees for efficient use of electricity, water, paper and reuse of equipment’s.

Green Office Guide

The guide comprises of the following instructions:

• In place of relying on printed documents, online communication will be extensively used (where possible) for office management to reduce use of paper along-with making unnecessary duplicates of same document.
• Make sure that the printers are defaulted to duplex for double-side printing to save papers.
• Bank will apply Eco-font in printing to reduce use of ink,
• Use scrap paper as notepads
• Avoid disposable cups/glasses to become more eco-friendly.
• Installation of energy efficient electronic equipment’s
• Installation of ‘Power save Mode’ of computers and ensuring shutdown of computer while not using and leaving the office place.
• Ensuring switching-off fans, lights, air coolers etc., while not using and leaving the office place that will help reducing electricity consumption.
• Energy saving bulbs should replace normal bulbs in branches/offices of the banks. issues should be taken steps to save energy from corporate business travel and
• Employees are encaged to avoid using vehicle to reduce gas and petroleum consumption
• Minimum utilization of electric bulb in day-time
• Minimum utilization of AC during the rainy season and winter.
• Avoiding use of electric appliance during peak SJIBL.
• Keeping the temperature level of AC not below 20 degree centigrade.
• Avoiding wearing of coat-tie during summer to lessen use of AC.
• Encage clients of take e-statements
• Encage the clients to use ATM cards instead of Cheque-Books.
• Advertising through electronic media avoiding the print Medias.
• Tele-Conference and Video conference should be arranged to avoid travels and reduce use of fossil fuel.

Some Green Products

• Finance for Farmers named as “Krishan”:

This facility will be allowed to farmer for purchasing highly productive seeds, fertilizer (green and environmentally friendly) and arranging irrigation.

• Finance for farmer for tree plantation named as “Shobujayon “:

This facility will be allowed for plantation in vacant lands that are not used for crops.

• Finance for handicraft and jute products names as “Kutir”:

This facility will be allowed for entrepreneurs for handicraft and jute products made out of natural material that will replace plastic and polythin products which are not disposable to the environment.

• Finance for re-cycle industry named as “Rupantor”:

This facility will be allowed for entrepreneurs of re-cycle industry made out of waste goods such as used paper, wood, glass, tin-pots, plastic bottles to make the environment clean and waste-management.

• Finance for solar-panel named as “Shobuj-Shokti”:

This facility will be allowed for house-holds, industries and business places for use of solar panel within the city and the rural off-grid areas to reduce of electricity.

•  Finance for industries names as “Shobuj Shilpo”:

This facility will be allowed to the industries that are having waste management plant/arrangement and those that are not involved with any activities against environment.

Finance for ETP plants names as “Shabujporibesh”

This facility will be allowed for installing ETP plants that makes the environment clean and green.

• Finance for smokeless brick making technology:

This facility will be allowed to the Brick fields that are using smokeless brick making technology IG-ZAGi to replace the old traditional method to reduce carbon emission for manufacturing alternative burner/cooker and fuel:

• Creation of Climate Risk Fund:

Bank will finance the economic activities of the flood, cyclone and drought prone areas at the regular profit rate without charging additional risk premium. However, banks will assess their environmental risks for financing the sectors in different areas for creating a Climate Change risk Fund with the approval of the Board of Directors. This will be used in case of emergency. The bank would ensure regular financing flows in these vulnerable areas and sectors. The fund could be created as part of bank’s CSR expenses.

Introducing Green Marketing

Green marketing is the marketing of products that are presumed to be environmentally safe. Green marketing incorporates a board range of activities, including product modification, changes to the production process, packaging changes, as well as modifying advertising. It refers to the process of products and/or services based on their environmental benefits. Such a product or service may environmentally friendly in itself of produced and/or packaged in an environmentally friendly way.

1. To make advertisement through electronic media (Radio, Television)
2. In the advertisements clients would be encaged to use ATM cards instead of cheque books and let them know that is how they are protecting their environment for their future generation.

Through advertisement the clients will be encaged for the following

• E-Banking (E-Transaction, E-Statement)
• Tele-Banking
• On-line Banking
• SJIBL Green Finances

Online Banking

SJIBL will undertake bank transactions or paying bills via the Internet on a secure website that will allow the customers to make deposits, withdrawals and pay bills. SJIBL shall give more emphasis to make the easiest way to help environment by eliminating paper waste, saving gas and carbon emission, reducing printing costs and postage expenses.

Phase -II

Sector Specific Environmental Policies

The Bank will formulate strategies to design specific policies for different environmental sensitive sectors such as Agriculture, Agri-business (Poultry & Dairy), Agro farming, Leather (Tannery), Fisheries, Textile and Apparels, Renewable Energy, Pulp and Paper, Sugar and distilleries, construction and housing, Engineering and Basic Metal, Chemicals, rubber and plastic industry, Hospital/Clinic, Chemical Trading, Brick Manufacturing, Ship Breaking etc.

Green Strategic Planning

The Bank will determine green targets to be attained through strategic planning. A set of Achievable targets and strategies will be determined and those will be disclosed in the annual report and website for green financing and in-house environment management. For in-house environment management, the target areas should cover attaining energy efficiency in the form of the use of renewable energy, reduction of electricity, gas and petrol consumption, reduction of Green House Gas emissions, issuance or e-statements, electronic bill pay, saving papers, environment friendly office building etc. For green financing, the target areas should cover reducing loans for certain environmentally harmful activities, attaining a particular percentage of environmental loans as percentage of total, introducing eco-friendly financial products etc.

Improved In-house environment management

Strategy of re-use, re-cycling of materials and equipments, and SJIBL see reduction and waste minimization strategy will be, part of in-house environment management. Banks will increasingly rely on virtual meeting through the use of video conferencing in lieu of physical travel which will help saving cost and energy.

Formulation   OF BANK’S   specific   environmental   risk   management   plan   and guidelines

Bank will develop and follow and an environmental risk management manual or guidelines in their assessment and monitoring of Projects and Working Capital investment. In addition to the compliance of national regulation, the will set internationally accepted higher environmental standard. In this connection, SJIBL will be involved in the Green Initiatives to be taken by a group of Banks.

Rigorous programs to educate clients

Business houses will be encaged and influenced to comply with the environmental regulations and undertake resources efficient and environmental activities. The Bank will introduce is program to educate clients. Considering the responsibility of making the clients well aware of 7iental issues the Bank will implement the following programs:

• Messages for protecting environment in SJIBL all sorts of Marketing and Promotional Activities.
• Focusing on environmental issues while selecting investment clients and communicates its importance by setting Environmental Risk as a deciding factor.
• Making the bank’s website as an important tool that we are doing Green Banking and making SJIBL clients green as well. The Website will be used for societal movement towards more social and environmental responsibilities in the financial sector.
• Inviting clients in seminar, symposium and other celebration program where facts, figures and pictures will be exhibited regarding how the environment is deteriorating and how are activities can prevent those for SJIBL sustainability.
• Bank will promote socially/environmentally-geared investment clients by recognizing them as their green clients.

Disclosure and Reporting of Green Banking activities

The Bank will start publishing independent Green Banking and Sustainability Reports showing past performances, current activities and future initiatives.

Phase-III

Designing and Introducing Innovative Products

The Bank will introduce innovative products like the followings for the environment conscious people:

Ethical Savings ACCOUNT:

 The bank offer Ethical Savings bonds, which offer 2-, 3-, and 5-year bonds with attractive rates and the money in these accounts is invested to businesses like organic farms, microfinance organizations, and renewable energy and climate friendly projects.

Jakat Account:

Jakat Account will be offered for accumulation of jakat throughout the year and short term finance will be allowed out of this money for green finance.

GREEN ACCOUNT:

Green   Bond   will   be   offered   with   attractive   return   for   investing   in rehabilitation of power plants and transmission facilities to reduce Green House Gas emission, Carbon emission, solar and wind installation and funding for new technologies that result in: ant reductions in Green House Gas emission and carbon emission.

Implementation of Green Banking policy by shahjalal Islami Bank Mirpur branch:

MIRPUR Branch at a Glance:

SJIBL established its 23rd Branch in Mirpur-10 at 01-11-2001. The Branch is banking with various types of account holders of deposit accounts as well as investment accounts. We have a mentionable amount of SBIS, HDS, and RDS investment in our branch. Huge number of foreign deposit accounts is also here.

MSS deposits are also increasing day by day. There are some valued investment clients who want  to get  specialized service. On the other hand, the other Banks situated in this area like Dhaka Bank, Uttara Bank, Sonali Bank etc. are offering various products, specialized service with advanced technology to attract the clients. In such situation, it is the time-need for our Branch to provide sufficient manpower, to update digital programs & other logistics support in order to deliver prompt & up to date banking service, to reduce untold pressure of voluminous works, to achieve the targeted goal & to survive in the 21^st century

Qualitative INTERVIEW AND answer:

I took a survey from Employees in Mirpur branch, the summery of that survey given bellow.

• 1^st question was Do Shahjalal Islami Bank Mirpur Br. Invest on “Solar power” or “Eligible for renewal power” or any “alternative power source” to save environment?
• All the employee give same answer that they do not have these type investment yet but SJIBL has.

• 2^nd Question was “Does Mirpur br. has any investment rate waiver for environment saving Project?”
• Different employees give different answer. This may cause they not practicing that much Green Banking function. And another reason that one of employee of investment department told “they do not get any application that can fully satisfy “environment saving project”. If they get any of this type application for investment, they would consider investment rate waiver as per rules of head branch.

• 3^rd question was “Do you have any tree plantation programmer?”
• This time all employee give similar answer that they have this type programmers.

• 4^th question was “Do you provide any training to your partners or buyers for environment saving activities?”

• Maximum employee told they do not directly provide any training to them but they provide guideline and make sure that applicant got certificates from “Department of Environment” of Bangladesh.
• 5^th Question was “Does this Have any policy about Green banking?” –

• All the employee ensure that The Mirpur branch have Green Banking Policy.

• 6^th Question was “What steps are taken for saving papers as well as tress?”

• Collective answer is “we are trying to preserve our documents in CD other than hard copy. Printing in both side of a single page and printing ink quality always economy mode or less color.”

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Green Banking performance of Mirpur Branch:

Findings

1. Mirpur Branch mainly invested in transport sectors, which is one of the main contributors to pollute Dhaka City. So, The policy of green banking are not properly maintained by Mirpur branch.
2. They have very low performance in ATM service, online service, and internet services. Though the location of the branch is covered with uneducated people and the business focused on coal, sand, road etc, client are not habituated with these service, but bank can motivated business people to habituated with these services.
3. Lac of available advertisement regarding green banking policy. People still don’t know about the practices of green banking followed by SJIBL.
4. Information regarding green banking polices are not available in Mirpur branch. They do not have green banking specialist. As a result green banking practices are not done properly.
5. Before investing in any project they only consider on the certificate provided by “Department of Environment of Bangladesh” and do the applicant have adequate mortgage property or not.
6. Maximum numbers of Employees of this branch are not aware about Green Banking.

Recommendations:

The way of to go ahead

• Need to apply Green Banking and use ERM (Enterprise Risk Management) guideline in an efficient manner.
• Bank should increase ATM service, Online service and internet services.
• Apply quantitative approach for Environmental Risk Rating.
• Bank should provide available advertising and arrange more seminar about green banking and motivate clients by different way to follow the policy.
• Bank should recruit green banking specialist, who give available information about green banking to clients.
• Mirpur branch should properly maintain green banking policy to invested in transport sectors.

What can do shahjalal Islami Bank Limited Specially       MIRPUR branch:

As largest bank of Bangladesh, Shahjalal Islami bank have many depositors, investors and other relation with people.  Shahjalal Islami bank can increase awareness of people to make seminar. They can make bound and help to their investors or partners.

As Mirpur branch have RDS sector to help rural people, and obviously this is a very nice project and will be effective if bank can run this properly. Branch can ensure green banking by this project. Branch can make a market where can farmers sell their goods at profitable price and final buyers can have it at reasonable price.

Mirpur branch can involve themselves with agribusiness, so that it will help rural people ads well as the branch can maintain green banking policy effectively.

Teen age or young people are the future of our country. They are the mostly user of technology. SJIBL should have plan for them. Have to offer special account for them. All technological and updated facilities will have there and have to create awareness among them.

Conclusion

Green is good for you and the planet. And banks big and small are increasingly offering green loans, sustainable certificates of deposit and paperless checking rewards that dish out discounts and fee breaks. The result: more green in your pocket. Green banking isn’t just for tree huggers anymore. It’s becoming mainstream as a way to make, save and lend money. “Customers want to make a difference in the environment,”

The easiest way for you to bank green is to start using the online banking services that are available. Benefits of online banking include less paperwork, less mail and less driving to branch offices, which all have a positive impact on the environment. Interestingly, online banking can also increase the efficiency and profitability of a bank. A bank can lower their own costs that result from paper overload and bulk mailing fees as more customers use online banking.

Banks can do much more to help the environment than just promote online banking. A truly green bank will reduce their carbon footprint by building more efficient branches, implementing energy-efficient operational procedures, offering transportation services for their employees, promoting sustainable banking and increasing their lending in environment-sensitive industries. Banks can also support eco-friendly groups and raise money for local environment initiatives.

The number of green banks should be increased because the future prospect of green banking is very bright in our country for the following reasons:

• The banks are encouraged to be green by Bangladesh bank,
• Recently the government made the companies mandatory to use solar plants to save electricity.
• Government has taken initiatives to digitize the banking transactions introducing online Banking” which encourage the paperless banking.

Banks and business in Bangladesh passed a critical year, surfing through an unprecedented climate both at home and abroad in 2011.  Amid challenges, the banking industry witnessed a major change, deregulation in some major areas including the interest and exchange rate in the outgoing year. Soaring inflation, record bank borrowing by the government, sliding foreign investment, aid and remittances, a bearish stock market and lack of infrastructure were the main barriers at the local level that left the banks in tight spot. A shift in imports form food grains to fuel oils and fertilizers also affected banks’ business in the outgoing year. However the liquidity crisis was the most discussed issue in 20l1. In the international front, ongoing sovereign debt crisis in Europe, which is a major destination for Bangladesh’s exports, and the troubled US economy, also hit local businesses. SJIBL has a great reputation for welfare banking in the industry, that’s why SJIBL has an acceptance among the clients. The market is very competitive and that’s why, we think that green banking can be an effective instrument for keeping present image to long term. Being the largest private sector commercial bank and having the maximum stake-holders, SJIBL has the ample  scope  for promoting  the awareness  about environment friendly  activities  and  it is utilizing the scope  for disseminating  awareness amongst the masses accordingly to keep the globe  eligible  for habitation.

Shahjalal Islami bank needs to be made fully aware their clients of the environmental and social guidelines to which banks worldwide are agreeing to as far as green banking is concerned,  Shahjalal Islami Bank Limited is far behind their counterparts from developed countries. If SJIBL desire to enter global markets, it is important that they recognize their environmental and social responsibilities.

In addition to mitigating risks, green banking opens up new markets and avenues for product differentiation. The survival of the banking industry is inversely proportional to the level of global warming. Therefore, for sustainable banking, Bangladesh banks should adopt green banking as a business model without any further delay.