Sustaining eco-friendly through green banking

Role of green banking to Sustaining eco-friendly

Abstract
In a globalised economy, the industries and firms are vulnerable to stringent
environmental policies, severe law suits or consumer boycotts. 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 paper explores the importance of Green Banking,
green banking products and providing banks in India. However, we find that there has not been
much initiative in this regard by the banks and other financial institutions in India though they
play an active role in India’s emerging economy. Therefore, we suggest possible policy measures
and initiative to promote green banking in India.
Key words: Green bank, environment and eco friendly.
Introduction

The term "Green Banking" is being heard more often today as more Americans look for
ways in which they can help the environment. While green banking can encompass a wide
variety of banking services or policies, many banks are actively promoting their online banking
services as a form of green banking. The environment and the banking industry can both benefit
as more bank customers start to use the online banking services that are available. Benefits of
online banking include less paperwork, less mail and less driving to branch offices by bank
customers, 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 if more of their customers use online banking.
Green banking also can reduce the need for expensive branch banks.

Why green bank is necessary

 Banks can do much more to help the environment than just promote online banking. A
truly green bank can reduce their carbon footprint by building more efficient branches,
implementing more energy-efficient operational procedures, offering transportation services for
their employees and carefully screening their lending in environment-sensitive industries. Banks
can also support eco-friendly groups, offer green lending and raise money for local environment
initiatives. Banks that go to these significant lengths to be eco-friendly are a little more difficult
to find than the banks that claim to be green by merely offering online services. Banks that offer
rate incentives on CDs, money market accounts, online savings accounts and checking accounts
for online banking also help the green banking cause by rewarding online banking customers. It
take a little bit of an incentive to convert some people away from paper statements and branch
banking. 

Green Mortgages: Green mortgages allow home buyers to add as much as an additional 15% of
the price of your house into your loan for upgrades including energy-efficient windows, solar
panels, or water heaters. The savings in your monthly energy bills can offset the higher monthly
mortgage payments and save you money in the long run. The Energy Efficient Mortgage (EEM)
is a type of HUD-approved green mortgage that will credit you for your home’s energy
efficiency in the mortgage itself. Banks offering these green mortgages will give qualified-HUD
borrowers the opportunity to finance cost-effective, energy-saving improvements to their house.
If you are undertaking an energy-saving house project, shop around for a bank that will offer a
great deal on a green mortgage.
 
Green Credit Cards: A green credit card allows cardholders to earn rewards or points which
can be redeemed for contributions to eco-friendly charitable organizations. These cards offer an
excellent incentive for consumers to use their green card for their expensive purchases. Imagine
the millions of dollars that could be raised for environmental groups if green credit cards really
took off.
Green banking products and providing banks
Green Loans: Wainwright Bank

Borrowers needing to finance an energy efficient home improvement can find a reduced home
equity loan rate from Wainwright Bank. A 0.50% rate reduction for a regular home equity loan is
available to customers who set up automatic payments from Wainwright Bank checking
accounts. Loans are fixed rate with terms of 5, 10 or 15 years. Energy efficient home
improvement projects can also have some federal tax benefits.

Green$ense Rewards: Citizens Bank

The Citizens Bank Green$ense checking account will pay you ten cents every time you make a
paperless transaction in your checking account. This can be a significant amount of paper saved
for active bank customers who use a debit card, pay bills online, and set up automatic payments.
You can earn up to $120 a year in rewards from Citizens Bank and guess what? The debit card
that they send for your account is made out of recycled plastic.

Saving with a Green Account: Bank of Utah

The iSave Online Savings Account from Bank of Utah motivates you to help the environment by
charging fees for any employee-assisted transaction. This can be perfect form of motivation to
encourage some people to bank online. The account requires a Bank of Utah personal checking
account, online Banking and eStatements. Each month only six pre-authorized, automatic,
telebank or e-transfer debits are allowed. The minimum opening deposit is $100 and a $100
balance must be maintained to avoid service fees.

Striving to be a Totally Green Bank: Green Bank

This Texas-based bank has made a promise to act in environmentally and socially-responsible
ways to support and strengthen the communities where they operate. Instead of only offering a
few green banking products, Green Bank is adopting an eco-friendly mission for the bank from
top to bottom. Products include green loans, green mortgages, green checking and green money
market accounts. The Green Bank website also includes educational resources and a carbon
footprint calculator. Seven Green Bank branch offices exist in the Houston and Austin area.
 

Green Rewards Checking Accounts: Coulee Bank

The Free Rewards Checking account from Coulee Bank will pay a 3.33% APY on balances of $0
to $25,000 and 0.51% APY for any balance over the $25,000 if the monthly online banking
qualifications are met. In addition, customers can receive up to $20 in ATM fee refunds every
month. Reward checking account offers like this deal from Coulee Bank help promote green
checking by offering strong incentives to rate-sensitive bank customers to convert and use online
banking services.

The Green Account: Freestar Bank

The Green Account from Freestar Bank rewards customers who adopt green banking services
like direct deposit, online banking, online bill payment, and debit card transactions. Customers
who meet the monthly account requirements can earn a 4.00% APY on balances up to $25,000.
By rewarding customers who use their green services, Freestar Bank is helping the environment
by reducing paperwork and carbon emissions. Branch offices are located in Illinois. 

Green Certificates of Deposit: Community Bank

Environmentally conscious residents of Iowa, Nebraska, and South Dakota can open a 12 Month
Green Saver CD or a 24 Month Green Saver CD at Community Bank. The Green Saver CDs
from Community Bank help promote the environment by utilizing online banking services. A
small quarterly transfer deposit is required and additional deposits are allowed before the
maturity date of a CD. The Community Bank green program is a simple way to benefit the
environment through your normal banking activity.

Customer’s part in green banking

 1. Go Online
It really is quite simple. Online banking = additional conservation of energy and natural
resources Paying bills online, remote deposit, online fund transfers, and online statements are
just a few of the ways that online banking can create savings from less paper, less energy, and
less expenditure of natural resources from banking activities. Customers can also save money by
avoiding many of those late payment fees or overdraft fees that can sneak up if the customers use
bank-by-mail or branch bankingservices. If the customers not yet signed up for online banking,
find a green bank with an online banking platform and make the move today.
2. Use Green Credit Cards
The benefit of using a green credit card is that some card issuers will donate funds to an
environment-friendly non-profit organization. Imagine kicking back a percentage of every dollar
to spend on the customer’s credit card to a worthwhile cause. Research the latest green credit
card deals to find a card that will give back to the organization.
3. Use Green Checking Accounts
Using a green checking account helps the environment by utilizing
more online banking servicesincluding online bill payment, debit cards, and online statements.
Consumers should be aware that banks offer green checking account because, ultimately, it helps
their profits and not for purely altruistic reasons. They can profit customers as well because
many reward checking accounts will pay ahigh interest rate to bank customers who meet certain
monthly requirements. Typically, the top tier rate only applies on balances up to a preset balance
amount like $25,000 or $50,000. Customers who do meet all the monthly online checking
requirements earn some of the highest rates available on FDIC-insured deposits. Visit the Green
Bank Report Checking Page for a list of the some of the latest green checking account deals.
4. Use Green Loans for Home Improvements
Before a customer undertake a major home improvement project, study if the project can
be done in an eco-friendly manner and if the customer might qualify for a green loan from a
bank. Green loans are perfect for energy-saving projects around the house. Find a
better loan rate and save energy costs all at the same time.
5. Does Your Bank Really Want to Be Green?
Most green banks will state in the information section of their website any commitment
to the environment, sustainable policies, or the local community that the bank has made. If the
customer still visit bank branches in his/her area, it is very easy to gauge the commitment made
to the environment by the bank. Does the bank branch look like every other bank branch in the
city or is the bank taking part in environment-saving policies around the office?
6. Political Considerations
 Politics is part of the equation when evaluating who the best green banks are in the US.
Banks support candidates who support the issues that they care about. However, just because the
bank made a contribution to a Republican candidate is no reason to assume the bank is anti-
environment. In the same vein, a few token contributions to Democratic candidates does not
anoint a bank as “green”. Anyone interested in the political stance of their bank can research the
topic at open document sites like opensecrets.org.
7. Stay Informed
The best green bank in the local area today, may not be the best green bank tomorrow. Stay
informed on all the green banking news, rates, and deals by visiting GreenBankReport.com.

Conclusion

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. 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. Green Banking if implemented sincerely will act as an effective ex ante
deterrent for the polluting industries that give a pass by to the other institutional regulatory
mechanisms. As Green Bank has rapidly expanded its operations, the challenge for its leadership
has been on managing this growth successfully and prudently. Through strategic partnerships
Green Bank seeks out advice and insight from outside experts to gain fresh ideas on new product
development, marketing and business solutions to overcome the inevitable problems of rapid
growth and to reach deeper into its customer base in an increasingly competitive market.
.