Banks’ green financing drops

Financing by banks and non-bank financial institutions for environment-friendly initiatives has dropped by 16.83 per cent or Tk 513.38 crore in the April-June quarter against that in the previous quarter.

In the April-June quarter this year, the banks and NBFIs have disbursed Tk 2,537.81 crore for environment friendly initiatives against their disbursement of Tk 3,051.19 crore in credits in the JanuaryMarch period last year, showed a BB quarterly review report on Green Banking Activities.

The disbursements amounted to Tk 2,020 crore and Tk 3,512.55 crore respectively in the previous two quarters.

Officials of the banks said that the decline was mainly because of the disruption in banking activities induced by the coronavirus outbreak in the country.

Speaking on the BB’s initiative to expedite green financing by the banks and NBFIs, the BB in its report said, ‘The BB is pursuing to boost the whole scenario by taking the appropriate policy initiatives.’

‘Refinance support from the BB is also playing an important role to incentivise the green banking activities,’ it said.

‘As the outcome of these initiatives, it is expected that positive impact will be evidenced in the trend of green finance by banks and NBFIs in gradual manner,’ said BB.

The financing areas of the banks and NBFIs for ecofriendly ventures include renewable energy, energy efficiency, alternative energy, waste management, recycling and recyclable product, green brick manufacturing and green establishment, among others.

As per the central bank’s regulations, the banks were supposed to disburse 5 per cent of their disbursed loans to green financing sectors.

However, the disbursement of loans to the sector by the banks represents 1.59 per cent of their disbursed loans while the ratio stood at 2.37 per cent for the NBFIs

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