Policy inadequacies and lack of right incentives are key constraints on expansion of sustainable financing towards green growth in both banks and the capital market in Bangladesh while the world economy is on fast transition.
Bankers and finance experts expressed this view at a conference Sunday in Dhaka, calling for urgent transformative measures from the government and the regulators concerned so the country doesn't miss the bus on the cusp of global economic transition.
Also among the drawbacks is a lack of coordination among authorities towards sustainable finance that involves green transition in production and consumption patterns.
The experts are of the opinion that only bankers alone can't implement sustainable finance as there is no direct benefit from it.
So, they said, "visible incentives will convince the board of directors to get on aboard of sustainable finance in greater interest of the country and green growth".
They noted that though there are some policies for banks and financial institutions, there is no clear policy for sustainable finance on the capital market.
The distinguished speakers urged the government and concerned regulators to work on the policies before graduating from the least- developed-country status.
They were speaking in different sessions at the conference on sustainable banking and financing, organised by Bangladesh Institute of Bank Management on its campus.
Speaking in one session, CEO of Mutual Trust Bank Mahbubur Rahman said banks reporting to the central bank "should be entirely paperless to encourage green growth".
He recommended for the central bank to think about rewarding sustainable finance-implementing banks in the tax policy.
City Bank CEO Mashrur Arefin said sustainable bank financing isn't part of core strategic policy of the country's banks.
"Banks are just implementing targets given by the Bangladesh Bank," he said, indicating lack of innovation in banking which is considered fulcrum of economic activity.
He said the regulators must ensure 'reward' and 'recognition' for the green growth.
"People wouldn't purchase a bond after naming it green bond. There must be distinguished benefits in it."
CEO of IPDC Finance Limited Mominul Islam said non-bank financial institutions are doing better than banks in implementing sustainable finance.
'But a small number of NBFIs only cannot do this-most of NBFIs are too small to implement this," he told the meet.
Former Director of sustainable finance department at Bangladesh Bank Khondkar Morshed Millat said renewable energy, waste management, recycling of plastic etc must be added to sustainable- finance policy now.
He said the central bank should increase the share of sustainable and green finance in their policy.
Former CEO of mutual Trust Bank Anis A Khan moderated the session on policy and operational issue.
At the concluding session, Economic Relations Division Secretary Sharifa Khan said rapid economic growth fuelled by carbon-intensive production systems and excessive environmental pollution push the whole civilization in jeopardy.
She feels "the present economic model is no longer sustainable for ensuring a healthy world for our future generations".
The secretary said green economic transition entails huge investment in almost every sector of the economy.
"It will be a tough call for the public sector to mobilize the required financial resources for a green and sustainable transition."
She also noted that green and sustainable transition is resource-intensive, challenging and painful.
"It entails both transitional, as well as physical risks."
Ms Khan said governments in Bangladesh and elsewhere in the world both are engaging private sector in the sustainable financing.
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