Commitment to sustainable reporting culture

is key to Bangladesh banks' transparency

and efficiency
‘Green banking’ initiatives are a must-have

Commercial banks in Bangladesh must prepare an annual sustainability report maintaining the
principles in the global reporting initiative. Bangladesh Bank has already formed the Sustainable
Finance Unit to monitor overall activities of all non-bank financial institutions (NBFIs) and
banks.

Bangladesh Bank issued a circular on 11 January 2021 requiring banks and NBFIs to disburse at
least 15% of their outstanding loans in the form of sustainable financing every year in order to
promote environment-friendly businesses. The circular also stated that 2% financing must be in
the form of green financing out of this 15%. Under sustainable financing, the banks/NBFIs will
disburse loans to set up machinery that enable lower carbon emission in the project/industry.

Prime Bank channelled more than $18 million from green transformation fund to multiple
export-oriented manufacturing industries. Dutch Bangla Bank formed a green banking team to
implement and report initiatives of the bank. BRAC Bank invested in LED bulb manufacturing,
plastic recycling, biogas, energy-efficient capital machinery, and fire door and fire-fighting
system. Islami Bank Bangladesh supported recycling or processing of waste by-products, brick
field (zig-zag), CNG re-fuelling projects, energy savings bulb projects, organic fertiliser, jute
project instead of poly, and tree planting activities.

Besides publishing the name of the top performing banks and financial institutions on its official
website, the central bank will consider other incentives for top performers by giving good rating
in CAMELS (capital adequacy, assets, management capability, earnings, liquidity, and
sensitivity.) Such recognition from the regulator will help banks to stay compliant and solidify
their position as a model for others. Bangladesh Securities and Exchange Commission declared a
special incentive for listed companies in terms of dividend and other activities including initial
public offerings.