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Preparing sector specific policy for banks is a big challenge: BB governor

Bangladesh Bank (BB) Governor Dr Atiur Rahman on Saturday suggested all banks to make their activities more eco- friendly, but alerted them about the associated risks that should be addressed with appropriate policy measures.

Addressing the Green Finance Conference 2014 at the Bangladesh Bank Training Academy (BBTA) at Mirpur in Dhaka city, the governor said all banks have their general credit policy for the lending sectors. But the nature of the different sectors is different from the environmental perspective.

“So, preparing sector specific environmental policy guideline for the banks is a big challenge. Quantifying environmental risk rating is another challenge,” he said and added that we need to be determined to convert challenges into opportunities.

Hence, he advised capacity building on environmental issues for both the central and the commercials bankers for structured green banking practices and Global Reporting Initiatives (GRI), which is a pre- requisite.

The governor called for establishing a better collaboration and partnerships among leading businesses, investors and key public institutions which can lead to new models of inclusive, green and sustainable growth.

He said a rapid large scale green transition is required for maintaining a global economic growth that may ensure green economy through simultaneous reduction of greenhouse gas emissions, adaptation to climate change and promoting sustainable use of resources available.

“This transition to a green economy has the potential to unlock new growth engines and spur business opportunities.  Improving resource efficiencies and greening the value chain, as means of creating major growth opportunities, generating new markets and jobs, and promoting social and environmental benefits are inevitable for sustainable development,” he said.

Dr Atiur said while the international banking communities are embracing the new way of doing business, we must also work on the sustainability of the principles themselves.

He said access to finance is vital for the successful implementation of green initiatives and an unencumbered flow of financing can expedite the growth of green industry.

Besides, availability of cost effective technologies is also essential for successful green mission in Bangladesh which is latent place for the development of green industries Referring to the central bank’s initiative in promoting green banking, the governor said banks in Bangladesh have been advised to finance solar energy, bio- gas plant, effluent treatment plant (ETP) and Hybrid Hoffman Kiln (HHK) in brick field under refinance programs.

He said in order to bring further momentum in this mode of financing the BB has already introduced Taka 200 crore refinance line against bank loans for investments in 16 green products.  Green Banking and CSR Department of BB organized the conference.

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