Full Length Paper - Role of Technology On Green Bankingl

St.
Josephs
College of Commerce, Bangalore
Green Banking
- A Study on Role of Technology towards Green Banking in

Nationalized Bank
Munnu Prasad. V1 and Prof. Muktha Kumar2

St. Josephs College of Commerce
No. 163, Brigade Road,
Bangalore 560 025
Telephone 080-65836437 / 25360644/46
Email: pgdept@sjcc.edu.in
1
2
Student of M.Com, St. Josephs College of Commerce. E-mail: pgdept@sjcc.edu.in

HOD of PG Department St. Josephs College of Commerce. E-mail: pgdept@sjcc.edu.in
Green Banking
Page 1
St. Josephs
Abstract
Keywords: Nationalized Bank, Technology, Green Banking, Benefits, Cost and Time.
Sustainability in Environment is one of the major problems in the present Materialistic, Modern World. The
Development in the Economy leads to growth in the Nation, but on the other hand we are not considering
the effects of the rational utilization of the Natural Resources. Sustainable Banking includes the elements
of preventive and offensive banking (Marcel H.A. Jeucken, 2001).
The Cause of Global Warming is due to the excess cut down of trees and building multistoried buildings all
over (i.e. based on mans requirement). Hence reduction of Carbon Foot print of Individual is less. Where
inverse its increasing day by day.
Banking Sector is one of the major agents for overall industrial activities and has majorly contributed for
economic growth. So, the Banking sector has taken an initiative for the reduction in the usage of papers
through use of proper technology which in return reduces the carbon foot print of the Individual.
Thanks for the technology innovation, because of this innovation; Banks has started adopting the
appropriated innovated technology to support for avoidance of Global Warming. Thus technology used by
Banking Sector has immensely helped India and the world.
Our Study is done to find out the role of Technology contributions towards Green Banking. Where in the
study we found that Extent of Technology used in few banks and others have tried to attempt, Reduction in
usage of Paper is very less compared to Private Banks, other Benefits of Technology (i.e. Time and cost)
and also to suggest the Green Banking to be implemented as hardcore rule by the central bank/Government
as a policy.
The methodology adopted includes 1. Primary Source: In the form of Questionnaire with the various Indian
Banks. 2. The Secondary data for the references and also for understandings. The Questionnaire is analyzed
by using the statistical tool, Correlation between Technology to Time and Technology to Cost.
Green Banking
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St. Josephs
The Suggestions through this paper is to adopt technology by banks to contribute towards Green Banking.
So as to reduce the carbon foot print by the Co-operative Banks, which are called as Members Bank in this
study and also to force the nationalized banks to use of Technology widely and to meets the clients
requirement.
Sustainable development can be achieved by allowing Banks to implement the Green Banking an
appropriate framework for cost efficient regulations and economic instruments.
Green Banking
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St. Josephs
Research Design
Title of the Project
Green Banking A Study on Role of Technology towards Green Banking in Nationalized Banks
Nature and Statement of Problem
To find the technology adopted by Banking Sector (ie Nationalized) and also its contribution to the
avoidance of Global Warming
Objectives of the Study
1.
2.
3.
4.
To find out the extent of technology used.

To determine the reduction in the use of paper.
To study the benefits of using Technology.
To suggest the use of Technology to promote Green Banking.
Data Collection
Primary Data:
It is collected with the help of Questionnaire which issued to various Indian Banks (ie nationalized). The
Sample size was 13, the type of sample is Snow Ball Sampling.
H0: There is no significance change in role of technology for contribution in Green Banking
Ha: There is a Significance change in role of technology for contribution in Green Banking
Secondary Data:
This research requires much secondary data that is in the form of historical information from various
relevant sites and also various journals, articles, company reports and databases.
Statistical Tool for Analysis:
The Questionnaire is analyzed by using the statistical tool Correlation. Correlation between Technology to
Time and Technology to Cost is ascertained.
Limitations
This project is limited only to Indian Banks and it is also limited to Bangalore
Green Banking
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St. Josephs
Introduction
What is Green Banking?
It means promoting environmental-friendly practices and reducing your carbon footprint from your
banking activities. This comes in many forms. Using online banking instead of branch banking, paying
bills online instead of mailing them, opening up CDs and money market accounts at online banks, instead
of large multi-branch banks, or finding the local bank in your area that is taking the biggest steps to support
local green initiatives.
Green Bank Report (http://s.tt/12gNy)
Why Green Banking Needed?

Customers have plenty of choices for selecting the financial institutions, they look for more modernized
and also the use of technology in Banking. Since there is high demand for the development in the banking
industry from the customers banks are forced to adopt modern technology and also high environmental
awareness is driving the number of financial institutions to go green.
Banks play an indispensable role in mobilizing financial resources across the economy in particular,
providing capital for large -scale infrastructure and low carbon technology deployment.(Climate Change
and Finance in India, 2010 May).
Computerization History in India:
Committee on Mechanization in the Banking Chairman:
Dr.
C.
Rangarajan,
Deputy
Industry (1984)
Governor , RBI
Committee on Communication Network for Chairman: Sri TNA Iyer, Executive Director,
Banks and SWIFT implementation (1987)
Committee on Computerization in Banks (1988)
RBI
Chairman:
Dr.
Rangarajan,
Deputy
Governor, RBI
Committee on Technology Issues relating to Chairman: Sri W.S. Saraf, Executive Director,
Payments
Systems,
Cheque
Clearing
and RBI
Securities system in the Banking industry (1994)

Committee on Proposing Electronic Funds Chairperson: Smt. K.S. Shere, Principal Legal
Transfer and Electronic Payments (1995)
Adviser, RBI
Committee on INFINET (1999)
Chairman Sri Vasudevan
RBI Expert Committee on Legal Aspects of Chaiman: Dr. Mitra
Green Banking
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St. Josephs
Bank Frauds (2001)

Working Group on Electronic Money (2002)
Chairperson: Zarir Cama
RBI Working Group on Cheque Trauncation and Chairman: Dr. R.B. Barman,
Executive
e-Cheques (2003)
Director, Reserve Bank of India.
Core Banking Solutions (CBS (2009)
(Source: Lean and Green Banking in India, Ms. Varalakshmi and et al, 2012)
While offering several simple suggestions for practicing green banking arrangements, the specific
initiatives taken by banks in India are Indus Ind Bank introducing solar powered ATMs, SBI adopting
green banking policy and offering green home loans, Union Bank of Indias energy efficiency measures,
IDBI Banks membership in National Action Plan on Climate Change, ICICI Banks Corporate
Environmental Stewardship initiatives and also Clean Technology Initiatives, YES Banks community
development initiatives, ABN Amro Banks (now Royal Bank of Scotland) launching of Indian Sustainable
Development Fund as also the Role played by RBI in its CSR initiatives. Green Banking goes a long way it
serving its objectives (Lean and Green Banking in India, Ms. Varalakshmi and et al, 2012)
Imperatives of Green Banking:
Green banking is very important in mitigating the following risks involving the banking sector:
i)
Credit Risk: Banks financed for Extreme economic assets which affect through Globalization.
ii)
Legal risk: Banks should also look for the environmental aspects, if they fail there will a arise
in legal risk.
iii)
Reputation Risk: Due to increasing environmental awareness, banks are more prone to
reputation risk, if their direct or indirect actions are viewed as socially and environmentally
damaging. Reputation risks emerge from the financing of environmentally objectionable
projects.
As India has committed to reducing its carbon intensity by 20-25 percent from 2005 levels by 2020,
Banks started to finance more on the Green Finance projects like Green Mortgages, financing for green
initiatives taken on Green Infrastructure projects (ie both residential and non-residential). Hence, most
private banks started to reduce emission of carbon.
Green Banking
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St. Josephs
Green Banking Strategies:

Indian Banks can adopt green banking as a business model for sustainable banking by launching some
of the following strategies:
i)
Green Banking Financial Products: Indian banks should develop innovative green banking
financial products which can directly or indirectly help in the reduction of carbon emissions.
These banks can introduce a Green Fund to provide climate conscious customers the option of
investing in environmental friendly projects. Banks can also introduce green bank loans with
financial concessions for environmental friendly products and projects. Besides introducing
specific green banking products, banks can incorporate an Environmental Impact Assessment
(EIA) in their project appraisal while financing any project to measure the nature and magnitude
of environmental impact as well as suggest environmental risk mitigation measures. Banks can
also conduct environmental audits of the financed projects. Banks need to redesign their credit
products to assist SMEs to adopt quality and conform to environmental standards. Banks should
also include green guidelines in their credit policies to raise the green loan portfolio.
ii)
Green Mortgages
Banks such as State Bank of India is attempting for the mortgage lenders offering special
discounts on mortgages used to build or update buildings and homes to be greener. One of the
reasons for the push for green mortgages is that green building and rebuilding tends to
incorporate more energy-efficient materials and building plans.
There are two types of green mortgages: the Energy Improvement Mortgage its like a second
mortgage that is to be used to upgrade a home or building to energy efficient by installing
energy saving items such as solar panels and improved insulation - and the Energy Efficient
Mortgages for the construction of new energy efficient homes and buildings.
iii)
Carbon Footprint Reduction: Carbon foot-print is a measure of the impact of our activities on
the environment. It relates to the amount of GHG we are producing in day-to-day business
while burning fossil fuels for electricity, heating, transportation, etc. Banks can reduce their
carbon footprints by adopting the following measures:
Green Banking
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St. Josephs
a) Paper-less Banking: As banks have computerized their branches, there is ample scope for
doing paperless or less-paper banking. Mostly PSBs use huge quantities of paper for office
correspondence, audit reporting, recording public transactions, etc. These banks can switch
over to electronic correspondence and reporting. Banks should encourage their customers
also to switch over to electronic transactions and popularise e-statements.
b) Energy Consciousness: Developing energy- consciousness, adopting effective office time
management and automation solutions and using compact fluorescent lighting (CFL) can
help banks save energy consumption considerably. Banks can conduct energy audits in all
their offices for effective energy management. They can also switch over to renewable
energy (solar, wind, etc.) to manage their offices and ATMs.
c) Using Mass Transportation System: PSBs can become fuel efficient organization by
providing common transport for group of officials posted at one office.
d) Green Buildings: The Indian banking industry uses more than one lakh premises for their
offices and residential houses throughout the country. These banks should develop and use
green buildings for their office and employee accommodation.
These measures will not only help banks reduce their carbon footprint but also save the
operational costs considerably.
iv)
Social Responsibility Services: As part of the green banking strategies, Indian banks can
initiate various social responsibility services such as tree plantation camps, maintenance of
parks, pollution check-up camps, etc.
Green Banking
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St. Josephs
Analysis
1. Banks use Technology for Operations are Finacle, FlexCube, Banks-24, Sun Bank and Core
Banking
2. Does your Bank Adopt Technology for Green Banking
Yes
No
No. of
Respond
ents
9
4
Percenta
ge
69%
31%
The above chart shows that 69% said

that
they have adopted a technology for Green Banking. The other 39% say that they have
not adopted technology for Green Banking yet.
3. If Yes - To What Extent Technology is used
No. of
Respond
ents
To Large
Extent
Moderate
Less Extent
Percenta
ge
33%
3
4
2
45%
22%
The above chart shows that 45%

Moderate use of technology is done, 33%
say that usage of technology is Large Extent and very few say that use of technology
is towards Less Extent (i.e., 22%).
4. Do you think use of Technology is saving your time
Yes
No
No. of
Respond
ents
13
0
Percenta
ge
100%
The above chart shows that all the respondents agree that technology is saving time.
Green Banking
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St. Josephs
5. Do You think technology is saving the Operation Cost of Banking

No. of
Respond
ents
11
2
Yes
No
Percenta
ge
85%
15%
The above chart shows that the operation cost of banking is saved. 15% say that
adopting technology is not great in the operation cost of Banking.
6. To what extent do you think the technology adopted contribute towards Green Banking
No. of
Respond
ents
Large
Extent
Moderate
Less Extent
Percenta
ge
54%
7
2
4
15%
31%
The above chart shows that the technology is contributing towards Large Extent as per
the respondents of the Questionnaire, where 31% of the respondent says that
technology contributing towards Green Banking is Less Extent.
7. The Reason for your above marking is

a. Technology helped to reduction in paper
Ranking
1
2
3
4
5
No. of
Respond
ents
0
1
4
2
6
The above chart shows that the

ranking in the
reduction of paper is highly marked by respondents i.e., 5 consists of 46%, 31%
respondents mark for 3 i.e., average reduction of paper.
Green Banking
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St. Josephs
b. Technology helped to reduce Time
Ranking
1
2
3
4
5
No. of
Respond
ents
0
1
3
2
7
The above chart shows that 54% of respondent response towards reduce in Time
through adopting technology, where 23% respondent response its an average.
c. Technology helping to reduce Cost
Ranking
1
2
3
4
5
No. of
Respond
ents
0
2
5
1
5
The above chart shows that 39%

respondent
response that average of cost is reduced and 38% response was the technology is
helping to reduce cost.
d. Technology helps Convenience in Banking
Ranking
1
2
3
4
5
No. of
Respond
ents
1
2
0
5
5
The above chart shows that there is high positive towards Technology helps for
Convenience in Banking. (I.e., ranking of 4 of 39% and ranking of 5 of 38%).
Green Banking
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St. Josephs
e. Technology helps for Customer Satisfaction
Ranking
1
2
3
4
5
No. of
Respond
ents
0
1
2
3
7
The above Chart shows that the Technology is helping towards Customer
Satisfaction, the respondent response is high (i.e., ranking of 4 and 5 is 54% and
23%).
Correlation Analysis of Cost and Time from usage of Technology:
Ranki
ng
1
2
3
4
5
Time
(X)
0
1
3
2
7
Cost
(Y)
0
2
5
1
5
The above Chart shows that the Correlation between Technology to Cost is 0.877809 and
Technology to Time is 0.618123 and combined correlation is 0.81188, i.e., is highly
positive acceptance of the Green Banking through the appropriate technology adopted..
Green Banking
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St. Josephs
The correlation Analysis reject the Null Hypothesis and Accepts the Alternative
Analysis, Ha There is a Significance change in role of technology for contribution in
Green Banking
Green Banking
Page 13
St. Josephs
FINDINGS
The day which lead for the innovation of technology towards banking sector which has immensely helping
to develop day by day, one of the major result we are seeing is that Green Banking.
So Banks adopt technology to cut the cost and to reduce time.
1. Majority of the banks contributing towards the reduction of Carbon Prints.
2. Majority of the banks employees accept that the Technology towards Green Banking is helping to
Save Cost and also Time.
3. Majority of them say that, the Green Banking is reducing the Global Warming and also banks
should consider this programme as a Corporate Social Responsibility.
4. Majority of them say that the Green Banking technology should be adopted, if not it should be
legally enforced by concerned bodies (i.e., Central Bank/Government).
SUGGESTIONS AND RECOMMENDATION

The adoption of technology towards a Green Banking in India is immense, but most of them are not aware
of the concept behind Green Banking. The following are the suggestions and Recommendation:
1. First and Foremost, the Bank employees should know about Green Banking concept, where there is
a gap in knowing the concept of Green Banking.
2. Most of the nationalized banks has the Old staff, where they have very less knowledge on the
technology, even after the training they are not using the technology in the advanced level. Where
they do what ever is thought from the trainers (ie as it is).
3. Small check on Cooperative banks also done for the role Green Banking Technology usage, where
they have not given high consideration, so the Co-operative banks should awake and start adopting
the technology towards Green Banking.
The Co-operative banks think adoption of technology is cost high, but the banks should consider as
a onetime investment, where in the future it will be amortized. So the Co-operative banks should
invest for technology and help in reducing Global Warming.
4. The suggestion for the Central Bank/Government is to bring a stringent rule for adopting the
Technology and lend their hands towards Green Banking and also reduce their carbon emission,.
5. The banks should educate their customers about the Green Banking effectiveness and their user
friendly options.
6. By adopting the technology in all the banks the Central bank have a proper access of Management
Information System (MIS).
Green Banking
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St. Josephs
7. Banks by adopting Green Banking can be agents for changes in the present global warming, thus
banking sectors can be the pioneers for the contribution to reduce Global Warming
CONCLUSION
India is holding Future plans for reducing the Global Warming by 20 to 25% by 2020, where there will be
less carbon emission in the environment. Therefore adopting the technology for Green Banking is going to
be a supportive hand for reducing the Global Warming; the present generation should think to reduce the
usage of paper and their carbon emissions.
Less use of Paper, will lead to opening a savings tree bank account for future generation.
Bibliography
Connected Links:
1. www.accman.in/images/j11/Green_Banking__(2).doc
2. http://www.theclimategroup.org/_assets/files/Climate-Change-and-Finance-inIndia_2.pdf
3. http://www.malksp.com/blog/2011/10/bottom-line-of-green-banking-part-ii-greenlending-%E2%80%93-financing-the-future/
4. http://www.google.co.in/url?
sa=t&rct=j&q=Contribution+of+Technology+towards+Green+Banking&source=w
eb&cd=4&ved=0CFMQFjAD&url=http%3A%2F%2Fwww.accman.in%2Fimages
%2Fj11%2FGreen_Banking__(2).doc&ei=H5g_T773NMTJrAePy6G0Bw&usg=AFQjCN
GJg5yOzyIPcO_7YXggWw40Q8jv1Q
5. http://greenbankreport.com/green-bank-deals/what-is-the-meaning-of-greenbanking/
6. http://greenbankreport.com/#blank
7. http://www.scribd.com/doc/85043822/Lean-and-Green-Banking-in-India-2012
Research Journal and Papers:
1. Green Banking in India, Pravakar Sahoo and Bibhu Prasad Nayak, Discussion Paper Series No.
125/2008
2. Green Banking: An Innovative Initiative for Sustainable Development, Mr. Mridul Dharwal and Mr.
Ankur Agarwal
3. Climate-Change-and-Finance-in-India_2
Book: Sustainable Finance and Banking: The Financial Sector and the future of the planet, Marcel H. A.
Jeucken 2001 ISBN: 1853837660, Earthscan Publications Ltd.
Green Banking
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St.

- A Study on Role of Technology towards Green Banking in

Munnu Prasad. V1 and Prof. Muktha Kumar2

Student of M.Com, St. Josephs College of Commerce. E-mail: pgdept@sjcc.edu.in

To find out the extent of technology used.

Green Bank Report (http://s.tt/12gNy)

Why Green Banking Needed?

Securities system in the Banking industry (1994)

Bank Frauds (2001)

Green Banking Strategies:

The above chart shows that 69% said

3. If Yes - To What Extent Technology is used

The above chart shows that 45%

4. Do you think use of Technology is saving your time

5. Do You think technology is saving the Operation Cost of Banking

7. The Reason for your above marking is

The above chart shows that the

The above chart shows that 39%

e. Technology helps for Customer Satisfaction

Correlation Analysis of Cost and Time from usage of Technology:

SUGGESTIONS AND RECOMMENDATION

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