Introduction Green Banking
The disastrous impact of recent floods, droughts, storms and excessive heat around the world,
motivate us to think seriously and to do whatever we can to address the problem of global warming
(IRDBT, 2014). The world is very much concerned about the environmental issues in the global
economy. Man-made gases like hydro-fluro carbon, nitrous oxide, carbon dioxide and methane are
found responsible for the distortion of climate. It has made a significant impact on biodiversity,
forestry, agriculture, water resources, dry land and human health. A study conducted by Hayward
(2013) showed that out of 1000 CEO’s studied across the world, 67% believe that the global
economy is not going on the right path to meet the demands of the growing population and to
address the global sustainability challenges. United Nations Environmental Program (UNEP, 2014)
defines green economy as “one that results in improved human well-being and social equity, while
significantly reducing environmental risks and ecological scarcities.” In a simple term green economy
is resource efficient, low carbon and socially inclusive.
Importance of Green Banking
Now a days, most of the commercial lending process in different parts of the world scrutinizes
projects with a set of tools by incorporating environmental concerns in their day-to-day business.
The financial institutions should encourage projects which take care of following points while
financing them viz.,
(a) sustainable development and use of natural renewable natural resources
(b) protection of human health, bio -diversity, occupational health and safety, efficient production,
delivery and use of energy
(c) pollution prevention and waste minimization, pollution controls (liquid effluents and air
emissions) and solid and chemical waste management and
(d) there should be a third party expert to draw a plan for the environment management plan. They
should keep above aspects in mind while financing any projects.
(ii) Analyzing the project in terms of scale, nature and the magnitude of environmental impact. The
project should be evaluated on the basis of potential negative and positive environmental effects
and then compared with the “without project situation”. There should be an Environmental Impact
Assessment (EIA) of each project recommending the measures needed to prevent, minimize and
mitigate the environmental negative impact before financing the projects.
(iii) While investing or funding the projects, the financial institutions should assess the sensitive
issues like vulnerable groups; involuntary displacement etc and projects should be evaluated in
terms of environmentally important areas including wetlands, forests, grasslands and other natural
habitats.
(iv) Banking institutions need to evaluate the value of real property and the potential environmental
liability associated with the real property. Therefore, the banks should have right to inspect the
property or to have an environmental audit performed through the life of the loan.
(v) Banks also need to monitor post transaction for the ideal environmental risk management
program (Rutherford, 1994) during the project implementation and operation. There should be
physical inspections of production, resources, training and support, environmental liability, audit
programs etc.
(vi) The next round of evaluation includes loan structuring, credit approval, and credit review and
loan management. Further banks have annual audits, quarterly environmental compliance certificate
from the independent third party and also from the government.
(vii) Further the banks can introduce green bank loans and products like(a) investing in environmental projects (recycling, farming, technology, waste, etc) for example
reduced –rate of interest on loans to homeowners who install a solar energy system.
(b) Providing option for customers to invest in environmentally friendly banking products.
(c) Investing in resources that combine ecological concerns and social concerns.
The findings of the study are as under: 
Green banking avoids as much paper work as possible and rely on online/ electronic transactions for
processing so that we get green credit cards and green mortgages. Less paperwork means less
cutting of trees. It also involves creating awareness to banking business people about environmental
and social responsibility enabling them to do an environmental friendly business practice.
 Green banks adopt and implement environmental standards for lending, which is really a
proactive idea that would enable eco-friendly business practices which would benefit future
generations.
 When a loan is granted, the interest of that loan is comparatively less with normal banks because
green banks give more importance to environmental friendly factors - ecological gains.  Natural
resources conservation is also one of the underlying principles in a green bank while assessing
capital/operating loans to extracting/industrial business sector.
 Green banking as a concept is a proactive and smart way of thinking with a vision for future
sustainability.
 The value proposition for corporations to go green includes many of the same issues as that for
individual consumers but on a much large scope and with additional concerns. Corporations may
share a desire to reduce carbon footprint and enhance security by eliminating paper waste, but they
are also extremely concerned with eliminating or decreasing errors due to manual processing and
with creating a profitable bottom line. For these reasons and more, corporations are actively
pursuing green programs, many companies are taking active steps to reduce waste, implement
sustainability measures and increase profitability by going green.
HOW A BANK CAN GO GREEN?
A bank can go green by adopting the following steps or delivery channels:
a) GO ONLINE Online banking is very useful now. By online customer can check balance online,
payment of bills, transfer of funds and remote deposit. It is totally paperless banking. The use of
green banking creates less expenditure, less energy and less use of paper in banking activities.
b) MOBILE BANKING Mobile banking is very helpful. In one hand it is great ability to check and
transfer the balance and in other hand it is helpful in saving time of the customer. It also helps the
banking sector to save the paper. Most of banks are now providing mobile banking service.
c) INTERNET BANKING Internet banking is an electronic payment system that enables customers of a
financial institution to conduct financial transactions on a website operated by the institution, such
as a retail bank, virtual bank, credit union or building society.
d) ATM An electronic banking outlet, which allows customers to complete basic transactions
without the aid of a branch representative or teller. There are two primary types of automated teller
machines, or ATMs. The basic units allow the customer to only withdraw cash and receive a report of
the account's balance. The more complex machines will accept deposits, facilitate credit card
payments and report account information.
e) USE OF GREEN CREDIT CARDS Every rupee you spend on green credit card, the bank will donate
fund to the non-profit environment friendly organization for environment sustainability program. f)
SAVE PAPER Bank should use purchase the recycled product for customer use like deposit slip, ATM
slip, annual report etc.
g) POWER SAVING EQUIPMENTS Bank should use less power consumption equipment in place of
other equipment. Bank should start campaign to replace GSL bulbs by CFL bulbs. It will also
contribute a lot in environment sustainability program.
h) USE OF SOLAR AND WIND ENERGY Use of solar and wind energy is an efficient way to green
banking. State bank of India became the first bank in India to use and invest in solar and wind energy
plant.
9. BENEFITS OF GREEN BANKING IN INDIA:
a) Avoids Paper Work: Almost all banks in India are computerized or operate on a core banking
solution(CBS). Thus there is ample scope for the banks to adopt paperless or less paper for office
correspondence, audit, reporting etc. these banks can switch over to electronic correspondence and
reporting thereby controlling deforestation.
b) Loans at Comparatively Lesser Rates: Banks can also introduce green bank loans with financial
concessions for environment friendly products and projects such as fuel efficient vehicles, green
building projects, housing and house furnishing loans to install solar energy system etc.
c) Environmental Standards for Lending: Banks follow environmental standards for lending, is really
a good idea and it will make business owners to change their business to environmental friendly
which is good for our future generations.
d) Creating Awareness to Business People about Environment: Many NGOs and environmentalists
are propagating environment consciousness among the public in general by arranging awareness
programs and organizing seminars etc. Banks may associate themselves by sponsoring such
programs.
GREEN BANKING INIATIVES BY STATE BANK OF INDIA:
➢ SBI has launched Green Channel Counter from 1stJuly, 2010 as an initiative and innovative step
of green banking. GCC is available in 7052 branches and average number of daily transactions
through it, is more than 100000.
➢ SBI collaborated with Suzlon Energy Limited and generate green power by installing 10 windmills
with 15 MW aggregate capacities in the states of Nadu, Maharashtra and Gujarat. SBI is the first
bank in the country for generating Tamil green power.
➢ It became a signatory to the Carbon Disclosure Project in which bank is taking different
environmental sustainable initiatives through its branches spread across the country.
➢ EXIM bank and SBI entered in to an agreement to jointly provide loan up to 14 years Spain based
company Aston field renewable Resources and Group T- solar Global SA for building solar plants in
India.
➢ The bank has introduced a scheme known as Green Homes'. Under this scheme, the bank is
offering concessions such as reduced margin, softer interest rate and zero processing fees on home
loans for environment friendly residential projects rated by the Indian Green Building Council (IGBC).
➢ Moreover, the bank has launched its Green Banking Policy and decided to run ATMs on solar
energy to reduce their power consumption. It is the largest deployer of solar ATMs and saving more
than 2000 tons of CO2per year ATMs.
➢ The recent green banking initiatives of the bank also include paperless banking for customers,
clean energy projects and the building of windmills in rural India.
➢ On May 2016, a first of its kind fully digitalized branch called SBI Intouch Branch was inaugurated
by the State Bank of India, NE circle at 7360 Road, Guwahati. The main purpose of opening this
branch is to cater to the needs of young India. Some of the important services that they will offer are
automated account opening and credit facilities, ATM, Cash Deposit Machine, Electronic Cheque
Deposit Machine, Swayam Passbook Printer and even Video Consultancy facility. Recently, these
branches have been opened in other areas of Guwahati City
GREEN BANKING INITIATIVES BY ICICI:
➢ ICICI bank had adopted ‘Go Green’ initiative, which involves activities such as Green
products/offerings, Green engagement and green communication with customers.
➢ The bank is offering green products and services like Instabanking: - It is a service which gives
convenience to the customers to do banking anywhere and anytime through internet banking,
mobile banking, IVR banking, etc. This reduces the carbon footprint of the customers as they do not
require the physical statement or travel to the bank branches.
➢ Bank has sent nearly 200 thousand annual reports in electronic form and bank have saved more
than 60 tonnes of paper in the last quarter by sending e-statements to over 6.5 million bank
accounts and 300 thousand credit card customers.
➢ They are offering 50% waiver on processing fee of auto loans on the car models which uses
alternate sources of energy like the Civic Hybrid of Honda, Tata Indica CNG, Reva electric cars,
Mahindra Logan CNG versions, Maruti's LPG version of Maruti 800, Omni and Versa and Hyundai's
Santro Eco.
➢ The bank had reduced the processing fee for the customers who are purchasing homes in LEED
certified buildings.
➢ ICICI has partnered with the Indian government, World Bank and UNAID to support SME projects
in the area of green research and clean technology.
➢ The bank is celebrating World Environment Day every year on June 5. They perform various
activities on that day like green pledge through signature campaigns, plantation and distribution of
saplings etc.
➢ The bank always insists their customers for online bill payment, online funds transfer and
subscription to e-statements which promote ‘paperless’ and ‘commute free’ modes of banking
transactions.
2114-Article Text-4152-1-10-20201208.pdf
A STUDY ON THE ROLE OF COMMERCIAL BANKS IN SUSTAINABLE DEVELOPMENT THROUGH
GREEN BANKING IN GUWAHATI CITYWITH SPECIAL CONSIDERATION TO SBI AND ICICI
Afsana Sultana
Green Banking Infrastructure
The report has also talked about ‘Greening Infrastructure’ such as establishing IT infrastructure and
physical infrastructure of banks in such a manner so that they can generate the electricity for their
own consumption. According to IDRBT, “Green Banking is a multistakeholders' endeavour where
banks have to work closely with government, NGOs, regulator, consumers, and business
communities to reach the goal” (IDRBT, 2013). The United Nations Environment Program Finance
Initiative (UNEP FI) and the Equator Principles (EPs) are the two key initiatives taken internationally
to create a common protocol to manage environmental worries. These initiatives are mainly
applicable for financial sector to set their green goals, cultivate their green strategies and perform
their greening activities by integrating the environmental and social dimensions to financial
performance and risk associated with it in financial sector (Trehan, 2015).
2015). IDRBT has identified processes, products and services, strategies and other activities, as the
major avenues of Green Banking. The green processes of banks comprises of implementation of
techniques and plans that reduce inventory, wasted freight, etc. and acceptance of networked
design using a carbon footprint as a part of supply chain management activities; to enable paperless
transactions and embracing of techniques for workforce, parts optimization and intelligent device
management as a part of enterprise resource management activities; using electronic means to keep
contact with and correspond with customers and minimization of paper-based correspondences in
customer relationship management activities; based on the sustainability rating of products, services
and operations, selection of vendors; as a part of product life cycle management introduction of
banking products and services which consume less resources and energy and also reduce carbon
footprint. IDRBT has also talked about setting of SMART (Specific, Measurable, Attainable, Realistic,
and Timely) green goals as the internal targets to reduce your carbon footprint along with timelines
(IDRBT, 2013). Menon, Sreelakshmi & Shivdas (2017) has explained Green Bank as those banks in
which their internal operations as well as the external operations which are eco-friendly and fulfill
the social responsibilities attached to the society, customers and stakeholders by encouraging the
online transfer of funds, online account balance checking, reduce paper usage of business and
clients operations, green loans, green cards, green education, green transport etc.
SBI INITIATIVES FROM 2000 – 2017
INSTALLATION OF WINDMILLS
SBI being the first bank of India to generate green power, has installed 10 windmills holding a
capacity of 15 MW in Gujarat, Tamil Nadu and Maharashtra. Not only this, there will be a further
progression of the initiative through installation of 20 MW more capacity in Gujarat. The most
paramount reason for the initiative is not only to be economically beneficial rather it is to preserve
the environment through less dependence on non-renewable resources. It is estimated that
although the installation cost of 1.5 MW windmill is around 10 crores, the operational cost for the
windmills will be nearly zero, hence, proving to be cost efficient. Suzlon Energy has taken the
responsibility of installation of these windmills with the objective of making Indian banks go green.
Further, the banks will support the companies by financing these projects at lower interest rates.
These loans will be popularly known as “Carbon Credit Plus”(ET Bureau, 2010).
GREEN HOUSING (SBI O) Green housing is another significant initiative taken by the State Bank of
India for promoting carbon less society. The bank has undertaken the responsibility of providing
credit to individuals involved in Green Projects. Green Buildings, with the use of improved designs
and operations are mitigating the adverse impact on the environment. The agencies in India that
hold the authority to certify the buildings to be green include, Leadership in Energy and
Environmental Design (LEED) INDIA, Indian Green Building Council (IGBC) and TERIGRIHA from TERIBCSD India. SBI, being the only bank in India stepping into this sector has launched “SBI Green Home
Loan”as a new product. The bank provides a Home Loan at 5 percent concession in margin and 0.25
percent in interest rate with no processing fee. The conservation practices involved use of natural
lighting and utilizing recycled water (Jaggi, 2014).
FINANCING ROOFTOP SOLAR PROJECTS
SBI has initiated supporting the green movement by providing credit to projects of setting up solar
rooftops at a large extent. It will finance 100 MW power generating solar panels worth Rs. 400
crores. State Bank of India will execute this development programme with the aid of World Bank
(moneycontrol.com, 2017). GREEN CHANNEL COUNTER (GCC) SBI has taken another step towards
green banking by shifting from paper based banking procedures to green channel counters in
numerous of its branches on 1st July 2010 (SBI, 2014). GCC can now be seen operating in 7052
branches of SBI with a daily transaction average of more than 100000. This is the most important
step taken by the bank as the major disposal of the banks are usually paper and enormous waste is
generated by using the paper. This leads to the cutting of trees at a fast pace resulting into
environment degradation.
LONG –TERM LOANS The bank provides loans at concessional rates of interest to the project
executors which ecological objectives and considerations especially in case of manufacturing
processes (Vadrale, 2016). A major initiative by SBI counts to be the joint agreement of SBI and
116 Export and Import Bank of India (EXIM) to endow a long-term loan to the Astonfield Renewable
Resources and Group T- Solar Global SA which is a spain based company. The banks have provided
the loan for 14 years for the purpose of installing solar plant in India (Yadav & Pathak, 2013). Also,
the bank has launched another loan product ‘Carbon Credit Plus’with the sole purpose of providing
credit to the Clean Development Mechanism (CDM) projects (Janakiraman, 2016).
SBI GREEN MARATHON SBI has currently come up with the idea of organizing marathons every year
to promote sustainability targets. The marathon was held in 6 cities including Delhi, Bangalore,
Chennai, Ahmedabad and Chandigarh in February and March 2019. The marathon was based on the
theme of “Run for Green” and every participant was given a sapling to be sown after finishing the
run for a green city. Along with this, most of the materials used for organizing the marathon were
environment friendly. The prominent purpose of this marathon was to create awareness about the
dire need of adopting green practices (India CSR Network, 2018).
GREEN BONDS A major measure on the part of the bank includes introduction of green bonds to the
market. The issue was made in order to raise funds for financing the projects which are environment
friendly. A value as high as $ 650 million was raised in September 2018 by the bank. Moreover, a
subscription which is three times higher than the actual value was received (Das, 2018). The bank
has targeted to invest the funds into projects using renewable energy, buildings with low carbon
emissions, energy efficient products, projects with sustainable transportation and also, projects
controlling pollution and waste disposals. A specialized green bond committee was formed with
competent people to regulate the objective.
DEVELOPMENT INITIATIVES IN RETAIL AND DIGITAL BANKING In order to promote green banking,
SBI has launched YONO as a source to spread knowledge about the omni-channel banking and
lifestyle platform initiatives taken by the bank. In September 2018 SBI acknowledged the various
digital developments which included SBI YONO –omni channel and lifestyle platform, State Bank
Buddy wallet, Anywhere Banking including mobile banking, SBI INTOUCH – a digital branch and more
in Bhopal (the pioneer, 2018).
SOLAR ATMS SBI propounds to be the largest employer of solar ATMs in the country. Initiated since
2008, this movement has been successful in mitigating the CO2 emission by 2000 tons every year.
the bank has installed around 250 ATMs with lenders covering the tops of 150 buildings with solar
panels till September 2018 and expected to install around 10000 ATMs in the coming two years
(businesstoday.in). The sole purpose of this project is to reduce carbo footprints and mitigate carbon
emissions to a substantial extent. Not only the ATMs, but the bank has adopted efficient time
management systems, automatic systems and effective lighting system for saving the energy.
ELECTRONIC ANNUAL REPORT Another factor contributing towards saving the planet includes
providing electronic Annual Reports (eAR) to the shareholders. Enormous wastage of paper was
recorded as a result of ZENITH International Journal of Multidisciplinary Research ________ sending
annual statements on paper. It was initiated on the request of the shareholders and at a nominal
amount which is contributed to charity. In 2014, the bank collected an amount of Rs. 3.09 Cr.
charging Rs. 100 per eAR and the donated to SBI children’s Welfare Fund. CARBON DISCLOSURE
PROJECT SBI became a signatory to Carbon Disclosure Project (CDP) along with the other 550
institutions with the objective of building and exercising stern actions on decreasing the carbon
footprint and encouraging green banking practices.