Green Banking PDf – All you Need to Know About Green Banking in India -Green Banking’ is yet another important topic under Banking Awareness. You can expect questions from this topic in your bank exams’ general awareness section.
What is Green Banking?
- Green Banking is an umbrella term that refers to the practices & guidelines that make banks sustainable in environment, economic & social dimensions by promoting eco-friendly activities & reducing carbon footprints from banking activities.
Considering the nature of banking processes and infrastructures, IDRBT offers guidelines for greening banking in two levels.
- Making day-to-day business operations, banking products and services greener by following simple practices and making them environmentally friendly.
- Making IT infrastructure (including data center) and physical infrastructure (including buildings) greener and taking initiatives so that a bank could itself generate electricity for its own consumption.
The sole purpose of Green banking is to accelerate clean energy market growth while making energy cheaper and cleaner for consumers, driving job creation, and preserving taxpayer money.
Green Banks are public finance authorities that use limited public money to leverage greater private investment in clean energy.
Green Banking Coverage Includes – Green Banking PDf – All you Need to Know
- Sustainable Banking
- Ethical Banking
- Green Mortgage
- Green Credit Cards
- Green loan
- Green Saving Accounts
- Green Checking Accounts
- Green Money Market Accounts
- Mobile Banking
- Online banking
- Remote Deposits
What are the risks involved?-Green Banking PDf – All you Need to Know
- If any actions (direct or indirect) of banks are viewed as environmentally or socially damaging, the banks are prone to reputation risks.
- For example, banks financing environmentally hazardous projects.
- If banks don’t comply with the relevant environmental regulations, they could face legal risks.
- Banks could also face risks of direct vendor liabilities for costs of cleaning up the damages, in case they possess assets that cause pollution.
- The changing climatic conditions may pose a direct or indirect cost to the bank. Sometimes extreme weather conditions affect the economic assets financed by the banks; this could lead to high incidence of credit default.
- This could also happen when banks are lending to companies or business that get affected due to the environment regulations.
Green Banking Initiatives in India -Green Banking PDf – All you Need to Know
The State Bank of India (SBI)
- SBI is the first bank in India to promote green banking by launching green banking policies and promoting green projects. SBI has also set up windmills in the states of Tamil Nadu, Gujarat & Maharashtra that produce 15 MW power.
- IDBI provides services to its clients in the field of Clean Development Mechanisms (CDM)
- Yes Bank has launched projects in areas of clean technology & alternative energy
- HSBC Bank has devised targets to reduce the impact of its operations on the environment.
Punjab National Bank
- The PNB has taken several measures to reduce emission & energy consumption
Kotak Mahindra Bank
- The Kotak Mahindra Bank had launched the ‘Think Green’ campaign and took several initiatives under it like encouraging its customers to sign up for e-statements and reduce paper consumption.
- Kotak also tied up with grow-trees.com to plant one sapling on behalf of their customers for every e-statement.
Bank of Baroda
- BOB funds projects which help in earning carbon credits such as Biomass, windmills, and solar panel projects.
- The also funded some commercial projects as part of their green banking initiatives.
- The IndusInd Bank has installed solar powered ATMs in different cities across India, to save energy and reduce the emission of CO2.
- Canara Bank has adopted several eco-friendly initiatives such as mobile banking, telephone banking, solar-powered biometric operations and internet banking as part of their contribution towards green banking.
- ICICI Bank had launched a ‘Go Green’ campaign for greener communication with customers, green engagement and offering green products & services.
- HDFC Bank has taken several initiatives under green banking for effective use of paper, energy efficiency & reducing carbon footprints.
Green Banking Strategies
Following are some of the strategies that banks can adopt to further their contribution in green banking:
- Banks can provide transportation facility to bank officials who work in the same branch.
- Banks can adopt paperless banking and go digital. A lot of banks are already shifting to CBS or ATM platforms and providing their consumers electronic banking services & products.
Carbon Credit Business
- Every nation needs to work towards reducing emission of greenhouse gases and carbon to protect the environment. Emissions are certified by Certified Emission Reductions also known as carbon credit.
- Banks can install energy efficient equipment in their branches across the country & transform green banking in waste management, hardware & energy efficient tech products and donate energy efficient equipment to hospitals & schools.
- Banks can offer green loans on low rate of interests.Green Credit Cards, Green loans and Green Saving Accounts for all Customers .
- Banks, like other business entities, have a social responsibility toward the society. They can initiate various initiatives for the welfare of the social sector like maintenance of parks, planting trees and pollution checkup camps.