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Green and sustainable finance saw a notable increase during the October-December 2024 quarter.
According to the Bangladesh Bank (BB), banks and financial institutions contributed a total of Tk 86.46 billion to green finance in the period, up by Tk 18.49 billion from Tk 67.97 billion in the July-September quarter.
The green financing by banks and non-bank financial Institutions (NBFIs) increased by nearly 27.2 per cent during the period under review, BB data shows.
Since 2011, the BB has been proactively guiding banks and NBFIs in this regard.
The introduction of the sustainable finance policy has provided banks and finance companies with an opportunity to contribute to inclusive sustainable green growth.
This includes green finance, sustainable agriculture, sustainable CMSME (small and medium-sized enterprises), socially responsible financing and other activities linked to sustainability.
The regulator's latest report styled 'Quarterly Review Report on Sustainable Finance of Banks and Financial Institutions (FIs)' disclosed the funding data.
Similarly, the total contribution to sustainable finance stood at over Tk 1.48 trillion-an increase of Tk 422.43 billion or 39.9 per cent compared to Tk 1.05 trillion in the previous quarter.
The sustainable financing by banks and NBFIs increased by nearly 39.9 per cent during the period under review, the BB data showed.
During January-December 2024, 34 banks and 8 finance companies have surpassed the target of green finance (5.0 per cent) to the total term loan disbursement.
Moreover, during the year 30 banks and 13 finance companies have been able to fulfil their target (20 per cent) of sustainable finance to the total loan disbursement.
Sustainable finance refers to business conducted in such areas and in such a manner that contributes to the reduction of both external carbon emissions and the internal carbon footprint.
The central bank's data showed that in the July-September 2024 period, banks and finance companies' total contribution to green finance is over Tk 67.97 billion which is Tk 11.74 billion lesser than the April-June 2024 period.
In the July-September 2024 period, banks and financial institutions contributed a total of Tk 1.06 trillion to sustainable finance, which is Tk 109.27 billion less than Tk 1.17 trillion recorded in the April-June 2024 quarter.
The banking sector plays a key role in financing industrial projects such as steel, paper, cement, chemicals, fertilisers, power and textiles, which contribute significantly to carbon emissions.
There is no investment in Green Bond, Green SUKUK or impact fund by banks & finance companies in the review period.
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