Country's banks are maintaining a stiff policy in promoting the ecological balance as per the central bank orders while disbursing loans which, many believe, would help the industries grow on sustained basis.
Many also noted that assessment of environmental risk, along credit risk, before loan-approval will have a wide range of positive impacts in the banking sector and the overall economy.
They said such practice already started more or less increasing the quality of asset, the rate of loan repayment, and contributing to the sustainable investment and development.
According to a survey, conducted among 27 banks, all the banks consider the environmental aspect before taking lending decision.
About 62 per cent banks rejected loan proposal at least one time in the past only because of environmental consideration, as per the survey, conducted by the Bangladesh Institute of Bank Management (BIBM).
Khondkar Morshed Millat, Deputy General Manager, Green Banking and CSR Department, the BB, told the FE, "The green banking guidance was issued for sustainable investment."
Now, the banks are to asses both the credit and environment risks in disbursing loan. Comply with the policy leads to rise of loan repayment and as such reduction of non-performing loan (NPL) in the banks, Mr Millat said.
The policy is not resisting loan, rather it has many positive impacts, including sustainable investment, in the banking sector, he said, adding that the green banking practice will be smoother in the banks in the future.
The central bank started emphasising on the green banking policy and assessing environmental risks in early 2011 while the banks are complying with the BB guidance since July, 2011, Mr Millat added.
The central bank introduced a detailed guideline on Environmental Risk Management (ERM) for the banks to assess environmental risk along with the credit risk for an overall credit rating prior to disbursement of loan or credit facility.
Appreciating the BB policy, Pradip Kumar Dutta, managing director of Sonali Bank, largest commercial bank in the country, told the FE, "Along with reducing environmental degradation and maintaining ecological balance, the green finance benefit both the banks and the customers."
"Now, we are prioritising on environmental protection in disbursing finance to the borrowers," Mr Dutta said, and expressed hope that such finance's positive outcomes in the borrowers' industries might enable them to repay loan timely and easily.
Overall, there are positive impacts also for all concerned under the finance, he added.
"Consideration of environmental risk has increased and is rising among the banks in the recent past after the BB issued guidance circular in this connection," Md Abdur Razzaque, Assistant Vice President (AVP), investment administration division of the Islami Bank Bangladesh Ltd (IBBL), told the FE.
"If any industry doesn't comply with the environmental issues such as recycling of wastage and others, the banks' decision is 'not to' finance such industries," he said.
Mr Razzak also attributed the banks' stance about environmental issues to the awareness, created among the bankers mainly due to the BB's vigilance in this connection.
The banks are also receiving better response from the borrowers regarding repayment of loan because as, he said, the environmental compliance keep them stronger, self-confident and vibrant in doing business.
Overall, both the bankers and borrowers are playing the national role in preserving and protecting the environment, he added.
Terming the initiative in preserving the environment by the banks 'very positive', a environmentalist laid stress on strongly monitoring in this connection as, he alleged, different industries' actions degrading the environment was going unabated till now in many cases.
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