The amount of loans disbursed by banks and non-bank financial institutions for environment-friendly projects increased by 48.08 per cent or Tk 1,140.48 crore year-on-year in the October-December quarter of 2019 amid a significant drop in the private sector credit growth.
The private sector credit growth dropped to 9.83 per cent in December last year before a further plunge in February this year, 9.13 per cent.
The banks and NBFIs had also adopted green practices in their day-to-day business and long-term operations in the period.
According to the Bangladesh Bank quarterly report on green financing for October-December, 2019, the investments made by the banks and NBFIs in green initiatives increased to Tk 3,512.54 crore at the end of October-December quarter last year from Tk 2,372.06 crore in the same period of 2018.
With the new disbursement in 2019, the total outstanding green financing by the banks stood at Tk 25,957.83 crore and by the NBFIs Tk 3,091.8 crore, taking the total green financing volume to Tk 29,049.63 crore.
A BB official said that 31 out of 57 banks and 19 out of 33 NBFIs had exposure to green financing in the reported quarter.
Of the disbursed amount in October-December, 2019, the banks distributed Tk 3,342.19 crore, up 58 per cent or Tk 1,233.15 crore on the same quarter of the previous year (Tk 2,109.03 crore).
The central bank’s statement showed that total 663 entities including 202 large, 10 cottage and micro, 448 small and medium, and three other industries availed the green financing benefit from the banks.
The NBFIs disbursed loans to 23 large business and 13 small and medium industries for eco-friendly initiatives.
In February, 2011, the central bank issued a policy guideline for green banking.
Under the guideline, all operating banks and NBFIs have introduced environment-friendly banking activities.
In 2016, the banks and NBFIs were asked to disburse minimum 5 per cent of their funded loans for the green banking.
As per the central bank’s instruction, the banks and NBFIs had formed a ‘Climate Risk Fund’ by allocating 10 per cent of their corporate social responsibility budget for this fund.
Apart from the green financing, the central bank has already launched two green transmission funds (GTFs).
One fund worth 200 million euro and the other $200 million make the total size of the BB-formed GTFs $418 million.
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