Académique Documents
Professionnel Documents
Culture Documents
Supervised By
Farhana Rob Shampa
Senior Lecturer in Finance
Department of Business Administration
Northern University Bangladesh
Submitted To:
Department of Business Administration
Northern University Bangladesh
Declaration
I do hereby solemnly declare that the work presented in this dissertation report has been carried
out by me and has not been previously submitted to any other University/College/Organization
for an academic qualification/certificate diploma or degree.
The work I have presented does not breach any existing copyright and no portion of this report is
copied from any work done earlier for a degree or otherwise.
I further undertake to indemnify the department against any loss or damage arising from breach
of the forgoing obligations.
.
Sheikh Mohammad Sagor Ahmmed
ID-BBA 120104467
Major: Finance
E-mail: smsagor1994@gmail.com
Department of Business Administration
Northern University Bangladesh
Certificate
This is to certify that this report entitled Analysis of Green Banking Activities of
November, 2015.
....
..
Supervisor
Dean
Faculty of Business
ii
Internship Certificate
iii
Acknowledgment
At the very beginning, I would like to express my deepest gratitude to the Almighty Allah for
giving me the ability and the strength to finish the task successfully within the scheduled time.
This report Analysis of Green Banking Activities of Islami Bank Bangladesh Limited- A
Study on Bangshal Branch has been prepared to fulfill the requirement of BBA degree. I am
very much fortunate that I have received sincere guidance, supervision and co-operation from
various persons.
I would like to express my heartiest gratitude to my supervisor, Farhana Rob Shampa, Senior
Lecturer in Finance, Department of Business Administration of Northern University Bangladesh,
(NUB), for her continuous guidance, encouragement, and patience, and for giving me the
opportunity to do this work. Her valuable suggestions and strict guidance made it possible
to prepare a well-organized report.
I am also indebted to Mr. A.K.M. Shahidul Haque Khandaker (SVP), Mr. Md. Mijanur Rahman
(AVP), Mr. Md. Jafar Ahmad, Mr. Md. Abdum Nayeem Belal, Mr. Md. Belayet Hossain and all
staff of Islami Bank Bangladesh Limited who kindly spared for me much of their precious time
in giving me support and information. During the internship I was treated so cordially by the
Islami Bank Bangladesh Limited officials and staffs that I feel the office like my second home.
Finally, my deepest gratitude and love to my parents for their support, encouragement, and
endless love.
iv
List of Abbreviations
Short forms
Abbreviations
AD
Authorized Dealer
ADC
ATM
AVP
AWCA
BB
Bangladesh Bank
BACH
BACPS
BBTA
BIBM
CCI&E
CD
Current Deposit
CNG
CSR
e-IBS
ECR
EIA
EnvRR
ERM
FDD
FKAIP
HPSM
H.S Code
IBBL
i-Banking
Internet Banking
v
IBF
IBW
IDB
IMP
KYC
LC
Letter of Credit
LCAF
LAN
MEIS
MIS
MSA
MSND
MTDRA
NID
National Identification
POS
Point of sale
RDS
SBIS
SME
SMSA
SWIFT
TIN
TR
Trust Receipt
VAT
vi
Executive Summary
Islami Bank Bangladesh Limited is one of the renowned Banks in Bangladesh because it has
earned tremendous popularity and credibility among people for its better services. It is the only
bank of Bangladesh, which is staying in top-listed one thousand Bank of the world. This report
focuses about various activities of Green Banking activities of Islami Bank Bangladesh Limited.
Green banking is also known as a social, an ethical bank, alternative, civic, or sustainable bank,
is a bank concerned with the social and environmental impacts of its investments and loans. One
of the major economic agents influencing overall industrial activity and economic growth is the
financial institutions such as banking sector. In this report at first I tried to summarize an
overview of IBBL. Then I tried to describe my internship responsibilities and duties. In the main
part of the report, I have described the variety of green banking activities, budget, and major
performance of green banking. I also give some findings of report. In conclusion I describe the
advantages of IBBL to use Green Banking as an instrument to reach the 18 core people of
Bangladesh. Because one of the major economic agents influencing overall industrial activity
and economic growth is the financial institutions such as banking sector. Since banking sector is
one of the major stake holders in the Industrial sector, it can find itself faced with credit risk and
liability risks. Further, environmental impact might affect the quality of assets and also rate of
return of banks in the long-run. Thus the banks should go green and play a pro-active role to take
environmental and ecological aspects as part of their lending principle, which would force
industries to go for mandated investment for environmental management, use of appropriate
technologies and management systems. This report explores the importance of Green Banking,
sites international experiences and highlights important lessons for sustainable banking and
development in Bangladesh. Finally this report tries to draw picture how Sustainable
development can best be achieved by allowing markets to work within an appropriate framework
of cost efficient regulations and economic instruments.
vii
Table of Contents
Topic
Page No.
Declaration
Certificate
ii
Internship Certificate
iii
Acknowledgement
iv
List of Abbreviations
v-vi
Executive Summary
vii
CHAPTER ONE
INTRODUCTION
1.1 Introduction
2
2
2
3
3
4
CHAPTER TWO
OVERVIW OF THE ORGANIZATION
2.1 Overview of the Organization.........
2.6 Commitments...
10
11
CHAPTER THREE
INTERNSHIP POSITION AND DUTIES
3.1 Internship Duties and Responsibilities ...
12
12-13
13-15
15-17
18
CHAPTER FOUR
ANALYSIS AND FINDINGS
4.1 Green Banking of IBBL.
19
19
19-21
21
21
21-22
22
22
23
24
24-25
25
25-26
27
27
27
27
28
28
28
28
28-29
29
29
30
30
30
31
31
31
31
31
32
32
32
33
33-34
34
34
34
35
4.10 Findings.
36
CHAPTER FIVE
CONCLUSION AND RECOMMENDATIONS
5.1 Conclusion..
37-39
5.2 Recommendation
40
Reference
List of Tables
Table No.
Subject
Page No.
IBBL at a Glance
10
25-26
29
30
32
35
List of Figures
Figure No.
Subject
Page No.
11
Investment department..
13
25
29
30
Chapter: One
INTRODUCTION
1.1 Introduction
Bangladesh is one of the largest Muslim countries in the world. The people of this country are
deeply committed to Islamic way of life as enshrined in the Holy Qur'an and the Sunnah.
Naturally, it remains a deep cry in their hearts to fashion and design their economic lives in
accordance with the precepts of Islam. One of the nations leading banking specialists of
uncompromising quality in several world class banking. The leading banking company of
Bangladesh has been making every effort to ensure the effectiveness and safety of the financing
which it makes sure. Islami bank provides the highest quality financing at comfortable facilities
to fulfill the needs of the millions of people of the country.
The establishment of IslamiBank Bangladesh Limited on March 13, 1983, is the true reflection
of this inner urge ofits people, which started functioning with effect from March 30, 1983. This
Bank is thefirst of its kind in Southeast Asia. It is committed to conduct all banking and
investmentactivities on the basis of interest-free profit-loss sharing system. In doing so, it
hasunveiled a new horizon and weheard in a new silver lining of hope towards materializinga
long cherished dream of the people of Bangladesh for doing their banking transactions in line
with what is prescribed by Islam. With the active co-operation and participationof Islamic
Development Bank (IDB) and some other Islamic banks, financial institutions,government
bodies and eminent personalities of the Middle East and the Gulf countries,Islami Bank
Bangladesh Limited has by now earned the unique position of a leadingprivate commercial bank.
Time Constraint: Covering the entire Green Banking performance of the bank was a difficult
task within the time allowed for the internship program.
Lack of Experience: Preparing a formal document like an internship report requires some prior
experience in this field. I have tried my level best to reduce the distortion or biasness of
information that I have used in this report.
Chapter: Two
To ensure the soundness and development of the financial system based on Islamic
principles.
To become the strong and efficient organization with highly motivated professionals,
working for the benefit of people, based upon accountability, transparency and integrity
in order to ensure the stability of financial systems.
Try to encourage investment particularly in project, which are more likely to lead to
higher employment.
5
To emerge as a healthier and stronger bank at the top of the banking sector and continue
stable positions in ratings, based on the volume of quality assets.
To strive hard to become an employer of choice and nurturing and developing talent in a
performance-driven culture.
To ensure lucrative career path, attractive facilities and excellent working environment.
To ensure zero tolerance on negligence in compliance issues both shariah and regulatory
issues.
To train and develop human resources continuously and provide adequate logistics to
satisfy customers need.
To promote using solar energy and green banking culture and ecological balancing.
Welfare Driven
Environment Consciousness
2.6 Commitments
Shariah directives
Regulators
Shareholders
Society
Customers
Employees and
Environment
Name of Chairman
Local Shareholders
32.75%
Foreign Shareholders
67.25%
Authorized Capital
Paid-up Capital
Tk. 16,099.91Million
Tk. 560,696.30Million
Securities)
Total Assets (including Contra)
Import
Export
Tk.222,753.00Million
Remittance
Tk.308,722.00Million
597
723
Number of Shareholders
60,857
Number of Employees
13,574
294
30
Number of AD Branches
55
450
Credit Ratings
Figure: 1
Source: IBBl, Annual Report 2013
Branch Name
Bangshal Branch
Branch Type
AD
Address
Established
2 November, 1994
Manager
2nd Officer
Md Mijanur Rahman
No of Department
57
Telephone
02) 9556826
Mobile
01711-1693916
Fax
(02) 9583283
S.W.I.F.T
IBBLBDDH179
bangshal@islamibankbd.com
Web-site
www.islamibankbd.com
Call Center
16259
Table: 2
Source: IBBL, Bangshal Branch
10
Figure: 2
11
Chapter: Three
I am doing the
following tasks:
1. Provided the account opening from to the customers.
2. Helped the customer about how to fill up the account opening from.
3. Gave the signature card with account opening from.
4. Filled up the customers transaction profile and know your customer (KYC) form.
5. Added the check list in front of account opening form.
6. Gave the branch seal and signature verified seal of respective areas.
7. Filled up the account closing form, signature changing form, transfer account in branch
wish etc.
8. To learn how to transfer the customer amount of money by payment order.
9. Face to face dealing with customers such as knowing them about their cheques books
status, account balance status.
10. To provide them the cheques books and activate it on software named STELAR.
12
11. To learn general ledger in every days transaction and how to write down the Voucher
(Debit/Credit voucher) in this ledger sheet.
12. To learn the locker services.
13. To learn Check Clearing in Bank wished by BACH Systems.
14. Update the old format account and call the account holder to provide their information.
15. Provide service on phone call such as cheques book status, account balance status etc.
3.1.2 InvestmentDepartment
In investment section it learns different mechanisms of investment. I had also passed this section
only for 10 days. Investment can be made by the Islami Bank under the following modes: BaiMurabaha, Bai-Muajjal, Bai-Salam and Hire purchase under Shirkatul Meelk (HPSM).
Figure: 3
Source: From www.google.com
Basically, they are provided the investment in Bai-Murabaha called like: Bai-MurabahaTR and
Bai-Murabaha.
Bai-Murabaha TR:Bai-Murabaha TRmay be defined as a contract between a buyer and a
seller under which the seller sells certain specific goods permissible under Islamic Shariah and
the Law of the land to the buyer at a cost plus an agreed upon profit payable today or on some
date in the future in lump-sum or by installments. The profit may be either a fixed sum or based
on a percentage of the price of the goods.
13
Back to Back LC
ii.
3. Issue Export
4. Send Document to respective bank
5. Post shipment investment
6. Receive FDD/PO and send for collection
7. Realization
My internship program I had worked 10 working days at foreign exchange department. The
following tasks are done by me under foreign exchange department.
1. Made the IMP for filing the Letter of Credit(L/C)
16
17
2. Account closing: From this section, it has learnt the process of closing an account. To
close account, the account holder needs to apply in a form supplied by the bank
mentioning his/her account balance. Then the authorized officer approves the application
and the account is out from the general ledger.
3. Check Issue: If any client need cheque book I put his/her account name and account
number with the mobile phone number in to the register book. I also provide him/her the
cheque book collection date.
4. Investment Section:
i.
ii.
iii.
iv.
v.
vi.
5. Foreign Exchange Division: In this division, it opened the file of different clients. It has
learn from these files what papers are necessary for opening L/C. FSIBL frequently gives
opportunity to open Back to Back L/C to its trusted client keeping their master L/C as
line.
18
Chapter: Four
IBBL is always enthusiastic in participating and arranging various programs on green banking
and environmental issues. IBBL, as a recognition of its better Green Banking practices, was
selected for presenting a paper for the seminar on Green Banking: Opportunities & Initiatives in
Bangladesh held on 23 January 2014 organized by Bangladesh Bank Training Academy
(BBTA). IBBL was also designated as discussant for the seminar on Green Banking
& Environmental Risk Management held on 21st August 2014 organized by BBTA.
The investment policy of IBBL has been prepared not only considering the profit goals
but also considering the following ethical aspects8:
Islamic Sharia'h
Social Desire
19
National Investment,
Economic Justice
Environment Protection
As such, IBBL should extend banking facilities in production or trading of sharia'h approved
goods and services. IBBL should not extend any facilities against any speculative, health
hazardous detrimental products. They should emphasis the investments clients to install water
treatment plants where needed, or effluent treatment plants, or hazardous waste treatment plants
to qualify for investments. They should give high preference to environmental infrastructure
projects like renewable energy plant, clean water supply project, waste-water treatment plant,
Bio-gas plant, bio-.fertilizer plant etc. In addition to environmental infrastructure projects, we
should preference to energy saving and environment friendly product manufacturing projects.
They should give special attention on the following matters at the time of financing. Ensuring
maximum recycling/processing of waste/detrimental by-products;
Organic Fertilizer
20
Being an ethical bank, we should ensure diversified distribution of the wealth through diversified
and decentralized investment operations and hence in order to reach the banking services to the
poor people of the rural areas. These investment operations create self-employment in the
ruralareas through its agro based Rural Development Scheme (RDS), Micro-Enterprise
Investment Scheme (MEIS) and in the urban areas through Small Business Investment Scheme
(SBIS) and thus will ensure socio-economic uplift of the deprived people, poverty reduction and
employment generation. We should give emphasis to diversify our investment portfolio by size,
sectors, area, economic purpose etc.
4.2.2 Internal Operations and Environment
IBBL will try to be as much conservative as possible in use of resources like fuel, electricity,
paper and even water. They should ensure maximum efficiency while using resources. They
should try to avoid printing and print on both sides of a paper when needed. Reusing envelopes,
folders, Papers clips and using e-mail instead of paper correspondences, ceramic cup/glass
instead of disposable ones, CFL bulbs/tubes instead of the normal ones, scrap papers as
notepads, less fuel consuming cars. IBBL should try to use energy saving bulbs, and ensure that
there is sufficient arrangement for using day light and air circulation.
4.2.3 Adoption of Green Technology
4.2.3.1 Technologies in Internal Operations
IBBL is always pioneer in technology adoption. IBBL has developed an in-house built integrated
banking system namely e-IBS (electronic Integrated Banking System) in between 2001-2004 and
implemented the same covering all of its business aspects like:
Customer information
General Banking
Investment
Foreign Exchange
BASEL-II
SWIFT
Internet Banking
21
SMS Banking
Alternative Delivery Channels (Debit Card, Pre-paid Card, Remittance Card, Traveler
Card, Card less Transaction)
Centralize Foreign Trade Processing System (all types of LC, Bills issue & payment.
SWIFT Message generation & conversion)
Credit Card'
Security
Centralization of foreign trade operations for its in-house day to day to business
management and to ensure better & prompt services through acquainting the customers with
automation & paperless banking system.
communication
instead
of
paper
based
22
IBBL has been following the path of sustainability with efficiency and discharging its
responsibility to safe guard shareholders value by complying sharias & law of the land. The
Bank is always aware of continuous development of knowledge of the employees, competencies
and attitude of the employees; comfortable and modern working environment as well as justified
and competitive compensation packages for it employees.
The Bank is enhancing its customer services and adopting modern but green technologies where
needed. IBBL contributes to a great extent in inclusion of the small untapped deposits
andchanneling the same in the regular economic activities through opening account the lowest
initial deposit from Tk. 10/- to Tk. 500 considering the categories of products. IBBL also
designed many investment products for the deprived portion of the people and helps them
fulfilling their basic needs. Moreover, IBBL provides Quard (without any profit/interest) for
sanitation establishment of tube-well to ensure supply of pure drinking water. IBBL established
many hospitals to provide health services to the people at the lowest cost, organizes various
health camps, established many institutions (including technical) to ensure better education for
the people at the lowest cost and through Islami Bank Foundation (IBF).
IBBL also arranges scholarship programs, academic award, tree plantation programs, arranges
training/seminars etc. for women empowerment program, mobilizes charitable fund &,
contributes in relief and rehabilitation, takes measures for mitigating environmental risks for its
community and stakeholders. The Fael Khair Agro-Inputs Program (FKAIP) has been operated
in 23 upazellas under 12 districts. About 52,000 Sidor victim families have been brought under
the program and are provided with quard without any service charge or profit.
23
More emphasis is given on Small and Medium Enterprises instead of large scale industries and
rural areas instead of urban areas to ensure equity, justice, decentralization and balanced growth
of the economy while financing. It also gives emphasis in utilization of the hazardous toxics/by
products that are emitted from the industry and conversion of the same into hygienic products
and thus making those projects as the complete ones. IBBL itself always tries to promote its
products & services through counseling or by electronic media like its websites, television, and
radio etc. rather than using paper based media. It also encourages its customers to promote their
products & services in an environment friendly way.
24
Figure: 4
Source: IBBl, Annual Report 2014
Disbursement in 2014
Disbursement in 2013
Growth/decrease (%)
Investments
Number
Number
Number
Amount in
million Tk.
Amount in
million Tk.
Amount in
million Tk.
219
48,352.51
192
39,677.00
14.06%
21.87%
Bio-gas plant
0.89
7.00
0%
-87.29%
18
131.08
17
117.78
5.88%
11.29%
Bio-fertilizer plant
0.20
2.00
-33.33%
-90%
Projects financed
22
632.87
761.00
175%
-16.84%
Projects financed
having ETP
Installation of Zigzag
31
125.97
28
126.90
10.71%
79%
455
2,170.64
149
1,382.00
205.37%
57.07%
2,001.77
500.00
200%
300.35%
12
394.64
981.00
33.33%
-59.77%
11
510.46
198.00
22.22%
157.81%
12
370.05
419.00
140%
-11.68%
29.16
75.00
50%
-61.12%
14
4.12
4.00
366.67%
3%
1.50
0.06
50%
2400%
3930
21.96
3087
15.27
27.31%
43.81%
176.34
111.35
0%
58.37%
441.07
373.86
0%
17.98%
4835
55,368.53
3,530
44,751.22
36.97%
23.73%
kiln
Projects financed
having Zigzag kiln
Waste and hazardous
disposal plant
Waste paper
recycling plant
Waste battery
recycling plant
PET bottle recycling
plant
Financing of LED
bulb production
Safe/Clean Water
Supply Projects
Improved cooking
stove (Bandhu Chula)
Green finance at zero
rate of return
Electricity Generation
from Rice Husk
Rice bran Oil
Production
Total
Table: 3
Source: IBBl, Annual Report 2014
26
27
28
Particulars
Low
Moderate
High
Total
1503
456
72
2031
88,024.79
25,878.15
15,043.92
128,946.86
Amount
disbursed
against
rated
Table: 4
Source: IBBL, Annual Report 2014
20.53
Forgoing Profit
Blanket Distribution
57.26
Flood Relief
35.31
10
0
20
40
60
Amount in Million Tk.
80
Figure: 5
Source: IBBL, Annual Report 2014
29
Particulars
Number of Units
Tube well
3495
19.50
Sanitary Latrine
1493
6.60
Table: 5
Source: IBBL, Annual Report 2014
100000
80000
60000
40000
20000 14676
0
chart:
Figure: 6
30
13183 14103
26420
31
288
7405
3771
2.91
Table: 6
Source: IBBL, Annual Report 2014
32
4.4.7 Automation
The Bank has huge number of products like deposits, investment, IBW and other services
products which are automated and time savings for the customers. Advanced technologies are
being used to provide prompt and environment friendly customer services.
Various continuous processes have been there to minimize the banks direct operational impact to
environment in Bangladesh:
1. Soft archival of customer documents for electronic access and retrieval is enabling us to
reduce consumption of paper;
2. Majority of internal memos, process notes and records are in electronic form;
3. Internal communications are done through emails.Most of the staff have dedicated email
IDs for office use;
4. Customer communications are being done throughemails, SMS or ATM display instead
of lettercommunication(except for regulatory requirements);
5. Video conferencing with offices has reduced the needfor physical travel with associated
carbon emission;
6. Most of Foreign Trade Services of the Bank are handledthrough Centralized Trade
Processing. Besides, allcirculars, notices, memoranda and queries are issuedthrough
Intranet. Employment notices are given onwebsite and online applications are invited &
entertained;
7. The Centralized Investment Proposal Processing Systemof the Bank has been introduced
for efficient and promptdisposal of the investment proposals and to make thewhole
process of investment system more transparentwhich is running as a Pilot Project.
reported
by
banks,
they
are
already
34
68476
417
1500
3493
215.00
0.50
2.80
0.050
Deposits
Investment
368.57
43.00
1.33
890.46
1,303.36
644.37
Total deposits
1,947.73
5,243.63
Classified Investment
765.95
Investment Income
291.63
136.84
Import
4,523.01
Export
3,914.82
Remittance
250.63
8,688.46
59.56
Table:7
Source: IBBl, Bangshal Branch
35
4.10 Findings
The report findings about green banking policy of Bangshal branch of IBBL and IBBL are given
below:
1. A big portion of Bangshal Branchs investment is invested transport sectors, which is one
of the main contributors to pollute Dhaka City & Bangshal Branch has a great scope to do
green banking.
2. They have very good performance in ATM service, online service, and internet service.
3. Maximum numbers of Bangshal Branch Employees are aware about Green Banking.
4. Before investing in any project they only consider on what Department of Environment
of Bangladesh gave certificate or not; and do the applicant have adequate mortgage
property or project is environment friendly or not.
5. Branch recently introduce bank charge for checking the bank balance print copy and
there is no bank charge for checking balances through mobile banking or internet
banking.
36
Chapter: Five
5.1 Conclusion
Green is good for you and the planet. And banks big and small are increasingly offering green
loans, sustainable certificates of deposit and paperless checking rewards that dish out discounts
and fee breaks. The result: more green in your pocket. Green banking isn't just for tree huggers
anymore. It's becoming mainstream as a way to make, save and lend money. "Customers want to
make a difference in the environment".
The easiest way for you to bank green is to start using the online banking services that are
available. Benefits of online banking include less paperwork, more mail and less driving to
branch offices, which all have a positive impact on the environment. Interestingly, online
banking can also increase the efficiency and profitability of a bank. A bank can lower their own
costs that result from paper overload and bulk mailing fees as more customers use online
banking.
Banks can do much more to help the environment than just promote online banking. A truly
green bank will reduce their carbon footprint by building more efficient branches, implementing
energy-efficient operational procedures, offering transportation services for their employees,
promoting sustainable banking and increasing their lending in environment-sensitive industries.
Banks can also support eco-friendly groups and raise money for local environment initiatives.
In a rapidly changing market economy where globalization of markets has intensified the
competition, the industries and firms are vulnerable to stringent public policies, severe law suits
or consumer boycotts. This would affect the banks and financial institutions to recover their
return from investment. Thus, the banks should play a pro-active role to take environmental and
ecological aspects as part of their lending principle which would force industries to go for
mandated investment for environmental management, use of appropriate technologies and
management systems. As per the above discussion, we can say that customers are becoming
aware about various environmental issues and the hazardous effects of rapid industrialization, it
is necessary for organizations to attain sustainable competitive advantage by creating ecofriendly products. Banks can protect themselves as a socially and ethically oriented organization
37
electricity.
Government has taken initiatives to digitize the banking transactions introducing online
green banking and so on. It is time Bangladesh to take some major steps to gradually
adhere to the Green banking principles-guidelines that use environment sensitive
parameters apart from financial, to fund projects for sustainable development of the
country.
Banks and business in Bangladesh passed a critical year, surfing through an unprecedented
climate both at home and abroad in 2015. Amid challenges, the banking industry witnessed a
major change, deregulation in some major areas including the interest and exchange rate in the
outgoing year. Soaring inflation, record bank borrowing by the government, sliding foreign
investment, aid and remittances, a bearish stock market and lack of infrastructure were the main
barriers at the local level that left the banks in tight spot. A shift in imports form food grains to
fuel oils and fertilizers also affected banks business in the outgoing year. However the liquidity
crisis was the most discussed issue in 2015. In the international front, ongoing sovereign debt
crisis in Europe, which is a major destination for Bangladeshs exports, and the troubled US
38
economy, also hit local businesses. IBBL has a great reputation for welfare banking in the
industry, thats why IBBL has an acceptance among the clients. The market is very competitive
and thats why, we think that green banking can be an effective instrument for keeping present
image to long term. Being the largest private sector commercial bank and having the maximum
stake-holders, IBBL has the ample scope for promoting the awareness about environment
friendly activities and it is utilizing the scope for disseminating awareness amongst the masses
accordingly to keep the globe eligible for habitation.
Islami bank needs to be made fully aware their clients of the environmental and social guidelines
to which banks worldwide are agreeing to as far as green banking is concerned, Islami Bank
Bangladesh Limited is far behind their counterparts from developed countries. If Islami bank
desire to enter global markets, it is important that they recognize their environmental and social
responsibilities.
In addition to mitigating risks, green banking opens up new markets and avenues for product
differentiation. The survival of the banking industry is inversely proportional to the level of
global warming. Therefore, for sustainable banking, Bangladesh banks should adopt green
banking as a business model without any further delay.
39
5.2 Recommendation
Bank should keep following aspects in mind while financing any projects:
1. Investing in environmental projects (recycling, farming, technology, waste etc.) for
example reduced-rate of interest on loans to homeowners who install a solar energy
system
2. Providing option for customers to invest in environmentally friendly banking products
3. Investing in resources that combine ecological concerns and social concerns.
4. The report should be evaluated on the basis of potential negative and positive
environmental effects and then compared with the without report situation. There
should be an Environmental Impact Assessment (EIA) of each report recommending
the measures needed to prevent, minimize and mitigate the environmental negative
impact before financing the projects.
5. The bank should assess the sensitive issues like vulnerable groups; involuntary
displacement etc. and projects should be evaluated in terms of environmentally
important areas including wetlands, forests, grasslands and other natural habitats.
6. IBBL need to evaluate the value of real property and the potential environmental
liability associated with the real property. Therefore, the banks should have right to
inspect the property or to have an environmental audit performed through the life of the
loan.
7. Banks also need to monitor post transaction for the ideal environmental risk
management program during the project implementation and operation. There should
be physical inspections of production, resources, training and support, environmental
liability, audit programs etc.
8. The next round of evaluation includes loan structuring, credit approval, and credit
review and loan management. Further banks have annual audits, quarterly
environmental compliance certificate from the independent third party and also from
the government.
40
References
Iqbal KabirMohon,(2014), Islami Economics and Banking, (15th Edition), Jerin Publishers.
Dhaka,Bangladesh, PP: 274-284
Islami Bank Bangladesh Limited, 2013-2014, Annual Report 2013-2014 Islami Bank
Bangladesh Limited, Dhaka, Bangladesh
Islami Bank Bangladesh limited Variety of green banking activities of IBBL viewed on
December 05, 2015, <http://www.scribd.com/doc/Green-Banking-Emerging-Demand-of-IslamiBank-Bangladesh-Limited,>
Islami Bank Bangladesh Limited, Overview of the Organization, viewed on December 01,
2015, <www.islamibankbd.com/home/overview-of-ibbl.html,>
Mohammad Abdul Mannan (2015), Islami Bank Management, (6th Edition), Dhaka,
Bangladesh, PP: 113-125
Major Green Banking Performance Activities of IBBL, Disclosure of Islami bank Bangladesh
limited, viewed on December 02, 2015, <www.islamibankbd.com/./IBBL and Disclosure,>