24

CHAPTER II

REVIEW OF LITERATURE

This chapter reviews different studies pertaining to green banking

connected either directly or indirectly with environmental sustainability. The

review of literature is highly useful to design the study as it indicates the research

gap. The divergent perceptual frameworks involving various theoretical issues and

problems of the green banking are also scrutinized through the review of

literature. The study of customers’ perception towards role of green banking in

environmental sustainability has attracted the attention of many researchers

irrespective of countries, be it developed, developing or less developed. Therefore,

studies on these experiments of such countries are discussed and reviewed in this

chapter.

Bouma, Jeucken and Klinkers (2001)1 stated the significant impact of

banking activity on the sustainable development. In order to understand the banks’

role towards sustainability, they identified four stages: defensive, preventive,

offensive and sustainable banking. The authors highlighted the important

differences between regions, countries and banks with regard to sustainable

banking. The book looks at perspectives and case studies on how various changes

in the financial sector are moving banks in the direction of sustainability. They

focused on five central themes in their book: the policies of banks, transparency

and communication, environmental investment funds, environmental risks and

1
Bouma, J.J, Jeucken, M and Klinkers, L (2001). Sustainable Banking: The Greening of Finance,
Greenlea: Greenleaf Publishing.
 25

their repercussions for banks’ products, and the role of governments, NGOs and

multilateral banks.

Hao Guo (2005)2 analyzed the financing system for corporate customers in

the Industrial and Commercial Bank of China to explore the appropriate pathway

for ICBC and also other Chinese commercial banks towards sustainable banking.

The following research questions were addressed in this study: How should the

current financing system for corporate customers in ICBC deal with issues related

to environmental risks and financing at present? How can ICBC strengthen ERM

as preventive strategy towards sustainable banking? And what should ICBC’s

future policies of green financing be? A qualitative method was applied in this

study. The relevant and specific research methods used include literature review,

case study, and personal interviews. It was found that ICBC has not yet enough

environmental consideration for environmental financing due to internal and

external barriers. There is an increasing potential opportunities for ICBC to

implement green financing strategy in near future. According to the global trend

and the current Chinese banking situation, strengthening environmental risk

management should be an imperative task for ICBC and commercial banks. At the

same time, ICBC should establish an offensive green financing policy and strategy

to enlarge market share in environmental financing in near future. This will help

the bank further move toward the offensive phase of sustainable banking.

2
Hao Guo (2005). Pathways to Sustainable Banking in China: From Environmental Risk
Management to Green Financing, Dissertation Submitted to Lund University, Lund.
 26

Krebsbach (2005)3 stated that banks which adopted socially and

environmentally responsible lending and investing were altering their processes of

bond underwriting, investment banking and corporate lending. These banks were

enjoying a competitive advantage over others as society is aware of the

environmental issues. The author suggested that banks should adopt the green

lending principles in such a way that a customer base will not be affected. The

author said credibility comes from having high standards. He concluded that

environmental management in the banking sector is like risk management because it

reduces the credit risk, improves the asset quality and increases the enterprise value.

Stancu, Armeanu and B Lu (2006)4 investigated the decision processes of

banking, which are connected with environmental risks and options. He said that

incorporating sustainability criteria in lending processes will lead to credit

decision processes, which have positive socio-economic and environmental

outcomes. Banks have an important influence on economic processes and

significant impact on sustainable development. He tried to incorporate

sustainability aspects in lending processes by creating implementation models,

which are very useful for the banker’s day-to-day business.

Pravakar Sahoo and Bibhu Prasad Nayak (2008)5 stated that banking

sector is one of the major stakeholders in the industrial sector; it can find itself

3
Krebsbach, K (2005). “Green Revolution”, US Banker, pp.29-32.
4
Stancu, I, Armeanu, D and B Lu, F (2006). “The Role of Banks in the Sustainable Development
of Society”, Proceedings of the International Conference on Sustainable Development, Global
Change and Ecosystems, Washington: World Bank.
5
Pravakar Sahoo and Bibhu Prasad Nayak (2008). “Green Banking in India”, Discussion Paper
Series No. 125, Institute of Economic Growth, University of Delhi Enclave, North Campus, Delhi.
 27

faced with credit risk and liability risk. The environmental impact might affect the

quality of assets and the rate of return of banks in the long run. Thus, the banks

should go green and play a proactive role to take environmental and ecological

aspects as part of their lending principle, which would force industries to go for

mandated investment for environmental management, use of appropriate

technologies and management systems.

Ginovsky (2009)6 emphasized that in order to implement ecologically

friendly practices, banks should launch new banking products which promote the

sustainable practices and need to restructure their back office operations. The

author suggested the use of paperless banking to reduce the carbon footprint from

internal banking operations. Further, sustainable practices lead to saving cost to

the bank, because through automation they can avoid the cost of storage of paper

and the cost of courier vehicle fuel consumption and emissions; adoption of green

street lending, which means offering low rate of interest to customers and

businesses for installing solar energy systems and energy saving equipment like

solar hot water systems, highly efficient furnaces, heat pumps and replacement

windows. He discussed green buildings and renovations to existing branches to

implement ecological friendly practices. He did the study on Alpine bank. He had

suggested some aspects of green branch that were solar electric system, use of

wind energy, larger windows to allow natural light, interior lighting systems with

sensors, recycled material for the construction of furniture, carpeting, insulation

and tile flooring, use of low emitting paints and cleaning materials. According to

6
Ginovsky, J (2009). “Green Banking: Inside and Out”, Community Banker, pp.30-32.
 28

the author, construction of green building improves the public relation and

employee satisfaction and thereby it reduces the attrition rate of employees.

Atiur Rahman (2010)7 studied the monetary and credit policies of

Bangladesh Bank towards attaining broader financial enclosure. Bangladesh Bank

carries forward with technology driven, innovative, environment and low cost

banking approach; conveying a qualitative change in banking, application of

advanced banking technology, and use of information and communication

technology to extend financial services to the door step of common people. To

ensure access to financial services for all, various initiatives have been taken like

trade finance; digitalization of the financial sector, channeling liquidity into

productive and supply augmenting investments including agriculture, SMEs,

green banking and CSR activities; expected to inclusive growth and therefore

lessen poverty; required for pushing the country on course to the targeted vision of

digital Bangladesh by 2021.

Nigamananda Biswas (2011)8 stated the major benefits, challenges and

strategic aspects of green banking. He states that there has not been much

initiative in this regard by the banks in India, though they play an active role in

Indian economy. The public sector banks are waiting to be led by the Reserve

Bank of India and the private sector banks seem to only want to commit if there is

regulation. Lack of interest on the issue among customers is for the failure of

banks to declare their commitment to environmentally and socially responsible

7
Atiur Rahman (2010). “Financial Services at People’s Doorstep”, Bangladesh Bank.
8
Nigamananda Biswas (2011). “Sustainable Green Banking Approach: The Need of the Hour”,
Business Spectrum, Vol.I, No.1, January-June, pp.32-38.
 29

business. Therefore, banks need to be made fully aware of the environmental and

social guidelines to which banks worldwide are agreeing to.

Angelos Papastergiou and George Blanas (2011)9 examined the

sustainable green banking in Greece. The study is based on secondary data. The

research took place in two phases: the first phase was an up-to-date literature

review on corporate social responsibility in sustainable banking that identified

results, methodologies used and suggested future research. The second phase

included data collection about Greek banks through published sources. The

results showed that 50% of the banks are in the defensive phase, 40% in the

preventive, 10% in the offensive phase and none of the banks in Greece

belongs to the final and ideal phase of sustainability.

Kailash Arjunrao Thombre (2011)10 studied the concept of green banking

and identified the steps necessary to adopt green banking. The study was based on

secondary data. The main findings of the study are: banks are responsible

corporate citizens; they believe that every small green step taken today would go a

long way in building a greener future and each one of them can work towards

better global environment. Green banking can avoid as much as paper work, get

go green credit cards, go green mortgages and all the transactions done through

online banking. Green banking creates awareness to business people about

environmental and social responsibility to do an environmental friendly business

practice. Green banking follows environmental standards for lending, which is

9
Angelos Papastergiou and George Blanas (2011). “Sustainable Green Banking: The Case of
Greece”, Papastergiou-Blanas, pp.204-215.
10
Kailash Arjunrao Thombre (2011). “The New Face of Banking: Green Banking”, Golden
Research Thoughts, Vol.1, No.II, August, pp.1-4.
 30

really a good idea and it makes business owners change their business to

environmental friendly. He concludes that green banking is really a good way for

people to get more awareness about global warming.

Constantine Lymperopoulos, Ioannis E. Chaniotakis and Magdalini

Soureli (2012)11 explored the dimensions of green bank marketing, focusing on

the role of CSR, as well as its effect on green bank image. The researchers

conducted several in-depth interviews with marketing managers of banks in

Greece to identify the main issues related to green bank marketing, and generate

knowledge on the relevance of CSR. Semi-structured interviews were conducted

with 12 managers from the largest Greek banks. The research instrument used a

catalogue of green bank activities, policies and practices. The responses were

analyzed through matching patterns, searching for similarities and recurring

themes. The findings confirmed that green bank marketing is a complex,

multidimensional, latent construct, comprising mainly three variables namely,

GCSR, GIP and GPD. The survey results provided evidence of a positive effect of

green marketing on green image. In order for bank marketers to go green, the

study reveals specific ideas that can be put in action, such as sponsoring

environmental projects, training customers and employees to become more

conscious about the environment. The study suggests that the banks should pay

special attention to their internal processes, aiming at continuous improvement

and eco-friendly system solutions. By engaging in these green actions, banks can

acquire environmental reputation and establish their environmental concern.

11
Constantine Lymperopoulos, Ioannis E. Chaniotakis and Magdalini Soureli (2012). “A Model of
Green Bank Marketing”, Journal of Financial Services Marketing, Vol. 17, No.2, pp.177-186.
 31

Myung Ko and Ruben Mancha (2012)12 developed a theoretical model that

posits factors influencing internet banking use and validated it with a sample of

more than 300 respondents using Partial Least Squares. A survey instrument was

developed based on the review of the internet banking literature and other related

studies. The survey was administered to groups of undergraduate students at a

large public university in the south central United States. A total of 301 surveys

were collected. The results indicated that three factors such as openness to

experience from the five-factor model, perceived usefulness, and green concern

from peer pressure were positively associated with internet banking use. Security

concern was negatively associated with internet banking use, while perceived ease

of use was found to influence perceived usefulness. The results also indicated that

green concern has a strong positive association with internet banking use,

indicating that bank customers use internet banking because they are influenced

by people around them who practice going green.

Ioana Florentina Savu (2012)13 defined banks’ ecological behaviour and

established the role of non-governmental organizations and banking products in

bank’s ecological management. The study focused on projects that banks can

undertake in partnership with environmental organizations such as paper

recycling, forestation with employees, canvas bag, building solar panels and

sustainability tour. Through partnerships, green bank management seeks out

advice from outside experts to gain fresh ideas on new products and services
12
Myung Ko and Ruben Mancha (2012). “Customers’ Personality, their Perceptions, and Green
Concern on Internet Banking Use”, Journal of Information Technology Management, Vol.XXIII,
No.4, pp.21-32.
13
Ioana Florentina Savu (2012). “It’s Time for Green Banking Management in Romania”,
Economica, Vol. 8, No.2, pp. 61-69.
 32

development such as: green mortgages, green home equity loans, green

commercial buildings loans, green car loans, ecological affinity cards and online

banking. He says that Romanian government should be involved in cultivating

bank’s ecological culture, by constructing new financial system and improving the

existing financial instruments for ecological protection.

Sarita Bahl (2012)14 highlighted the green banking initiatives of the Indian

banks and enlisted the significant strategies for adopting green banking. The

present study employed both primary and secondary data. An intensive desk

research was undertaken to collect published data. For collecting primary data,

structured questionnaire has been used and 100 managers of public sector banks

were surveyed. The results showed that carbon footprint reduction by green

building has been given top most priority in green banking strategies. Therefore,

banks in India should develop green buildings as they consume less energy, water

and natural resources and create less waste, carbon footprint reduction by energy

consciousness. Green banking products have also been given due weightage as

banks can introduce green bank loans with financial concessions for environment

friendly products and housing loans to install solar energy systems.

Prita D. Mallya (2012)15 carried out a study to track the sustainable finance

initiatives taken by banks worldwide; to record the measures adopted by banks, to

ascertain the potential costs to banks from ignoring the environmental impact of their

financing activities; and to identify measures that could immediately be taken up by

14
Sarita Bahl (2012). “Green Banking: The New Strategic Imperative”, Asian Journal of Research
in Business Economics and Management, Vol.2, No.2, February, pp.176-185.
15
Prita D. Mallya (2012). “Sustainable Banking in India: The Road Less Traveled”, Proceeding of
the National Conference on Emerging Challenges for Sustainable Business, pp.311-326.
 33

Indian banks for environmentally responsible business. Sustainable finance has two

distinct threads: environmentally responsible finance and socially responsible finance.

This study is concerned with environmentally responsible finance by banks. The

study identified some financial products that offer opportunities for sustainable

banking in India. The study suggests that banks not only need to make direct

investments in sustainable development, they also need to leverage their indirect

control over investment to influence business into fulfilling broader social and

environmental goals.

Escobar, Miras and Guzmán (2012),16 the aim of their paper is to see if the

presence of women and political representatives in the Main Boards of SBs

affected to the amount spent on environment particularly and WF due to the large

differences found between them. For this, they have used a sample which includes

all the SBs, except only one because of homogeneity problems, that covers the

period from 2004 to 2008. The results revealed that the presence of women in the

Main Boards is higher than other Spanish companies. The percentage of the

profits that SBs spend on WF depends directly on the existence of political

representatives. The presence of women on the Board of Directors affects

positively to the percentage invests on environment. All the changes that are being

produced in the SBs due to the financial crisis which has culminated in the

banking sector restructuration, pose the dilemma of whether it will affect or not to

their social and environmental commitment. Specifically, such as variables of

16
Escobar, B, Miras, M .M and Guzmán, I (2012). “An Empirical Evaluation of the Environmental
Responsibility in the Spanish Savings Banks,” International Journal of Environmental
Research,Vol.6, No.4, pp.1089-1096.
 34

Board´ composition, we used the presence of women and the existence of a

political representative.

Mukesh Kumar Verma (2012)17 analyzed the evolution of green banking

concepts in Indian banking and its developments in Indian banks. The objectives

of this study are to find out demographic study of Jaipurites for banking; to trace

out the green banking evolution in India and its approach in Indian banks; and to

examine the awareness of bank customers about green banking. The study was

conducted at Jaipur with a sample of 275 different customers of 11 large banks

operating at Jaipur. The 25 customers were selected on random basis from each

bank. The names of banks are SBI, PNB, SBBJ, BOB, ICICI Bank, HDFC Bank,

Axis Bank, Bank of Rajasthan, CitiBank, HSBC and Standard Chartered. The

study found that only few of Indian banks have adopted green banking and

financed some of green banking based projects. There is negligible awareness of

green banking among bank staff and customers. Along with increase of their

banking business, banks can enhance their overall image and can serve the

community and earth. There is more scope for all banks and they can not only

save our earth but can transform the whole world towards energy conscious.

Banks must create awareness about green banking and adopt all strategies to save

earth and build banks’ image.

17
Mukesh Kumar Verma (2012). “Green Banking: A Unique Corporate Social Responsibility of
Indian Banks”, International Journal of Research in Commerce & Management, Vol.3, No.1,
January, pp.110-114.
 35

Hardeep Singh and Bikram Pal Singh (2012)18 analyzed the need of green

banking in business process so as to make the environment friendly and enrich the

economic productivity. The study employed primary as well as secondary data.

The primary data were collected through telephonic interactions and personal

interviews. Customers and general public were also interviewed. The study

suggests that Indian banks need to be made fully aware of the environmental and

social guidelines to which banks worldwide are agreeing to. State Bank of India

has gone with an operational segment of green banking.

Manoharan and Vijaya Kumar (2012)19 studied the concept of green

banking and identified the green banking initiatives taken by Indian banks. The

research is descriptive in nature. The secondary data were collected from various

publications of Reserve Bank of India, Government of India, journals, articles,

magazines, websites and newspapers. The study found that approximately 5% of

the daily transactions were routed through green channel counters. SBI saved

nearly 49504 A4 sheets with green channel counter between July 01, 2010 and

January 15, 2011 and the number of transactions was 123267. HSBC Bank, ICICI

Bank and HDFC Bank are not only keen on investing in green energy projects, but

also lead the way in cutting their own carbon emissions through unique initiatives.

State Bank of India and Yes Bank are generating additional business income

through carbon credit financing and advisory services.

18
Hardeep Singh and Bikram Pal Singh (2012). “An Effective and Resourceful Contribution of
Green Banking towards Sustainability”, International Journal of Advances in Engineering Science
and Technology, Vol.1, No.2, pp.41-45.
19
Manoharan, B and Vijaya Kumar (2012). “Green Banking: Bye-bye Cheques, Hello Electronic
Payments”, Asia Pacific Journal of Management and Entrepreneurship, Vol.1, No.3, November,
pp.60-74.
 36

Munish Sabharwal (2013)20 examined whether the selected Indian

scheduled banks are using eco-friendly technology and green methods to bring

down the carbon footprint or not. The study focuses on the various eco-friendly

methods and technologies that the banks can use to bring down the carbon

footprint and contribute in their own way. 16 scheduled banks were chosen by

adopting stratified sampling based on turnover of banks. The data were collected

from related articles and from published research papers, project reports, case

studies, books, magazines, newspapers, articles, etc. All banks must take initiative

for use of eco-friendly technology like solar powered ATMs, eco and power

friendly ATMs, use of less power consuming devices, cheaper loans for eco-

friendly building, projects and vehicles. Green accounting standards should be

developed and it should be mandatory for banks to give environment disclosures

in the annual reports. Energy audit must be conducted annually. Green rating

agencies should be set up to provide green analysis of lenders and users of green

loans via different ratings. By doing this, environmentally negligent banks may

run the risk of hurting their bottom-line as well as their image in the market.

Arunkumarashvinbhai Jinwala (2013)21 explored the importance of green

banking, international experiences and important lessons for sustainable banking

and development in India. He found that there has not been much initiative in this

regard by the banks in India though they play an active role in India’s emerging

economy. He suggests possible policy measures and initiative to promote green

20
Munish Sabharwal (2013). “The Use of Eco-friendly Technology and Green Methods to Bring
down the Carbon Footprint by Indian Banks”, Masters International Journal of Management
Research and Development, Vol.1, No.1, November, pp.76-85.
21
Arunkumarashvinbhai Jinwala (2013). “Green Banking in India: View of Space,” International
Multidisciplinary Journal of Applied Research, Vol.1, No.7, October, pp.84-86.
 37

banking. The study concludes that inspite of a lot of opportunity in green banking,

Indian banks are far behind in the implementation of green banking; only some of

the banks have initiated towards green banking. Banks must literate their

customers about green banking and adopt strategies to save earth and build banks’

image.

Md. Shafiqul Islam and Prahallad Chandra Das (2013)22 made an attempt

to analyze the green banking practices in Bangladesh; to justify the prospects of

green banking practices in Bangladesh; and to provide some suggestions in this

regard. The study is based on secondary data and these data were collected from

annual reports of the selected banks. The data were analyzed in the aspects of

practices and problems of green banking. The study suggests that government as

well as every bank should take initiatives in respect of green banking practices for

protecting the environment. Government should encourage the general people

about the green banking practices. The Bangladesh Bank should supervise

commercial banks whether they are practicing green banking or not.

Namita Rajput, Simple Arora and Akanksha Khanna (2013)23 examined

the association of environmental performance and financial performance. For this

purpose, they have selected the sample banks from database. Annual data for

income margin, net income and total expenses were collected for a period of

March 1997 to March 2013. The results showed that green banking and

22
Md. Shafiqul Islam and Prahallad Chandra Das (2013). “Green Banking Practices in
Bangladesh”, IOSR Journal of Business and Management, Vol.8, No.3, March-April, pp. 39-44.
23
Namita Rajput, Simple Arora and Akanksha Khanna (2013). “An Empirical Study of Impact of
Environmental Performance on Financial Performance in Indian Banking Sector”, International
Journal of Business and Management Invention, Vol.2, No.9, September, pp.19-24.
 38

environmental initiatives are still in their infancy stage in the Indian banking

sector and to reap the fruits, a big push is required in this paradigm. The study

concludes that green banking helps in reducing carbon footprints and is of pivotal

importance today.

Tan Hui Boon, et al. (2013)24 detailed the business potential of ethical

banking. Three empirical studies were conducted to assess the supply and demand

perspectives for ethical banking and green banking. In study 1, in-depth

interviews were conducted with 9 senior bankers from Malaysian and

international banks, and four industry stakeholders. Study 2 involved 169 business

corporations across different sectors from MNCs to small and medium enterprises,

to obtain corporate views on the demand for green and ethical banking. And in

study 3, 200 heads of households were surveyed on their views and demand for

green and ethical banking initiatives. The development of the interview protocol

and surveys were guided by the literature, and integrated input from the funding

organization. The study found that over 60% of individuals’ and corporate

respondents’ banking decisions were influenced by ethical and green banking. The

results revealed a strong demand for both corporations and individuals for ethical

banking, green banking, and initiatives such as green loans. Banks can thus create

greater public awareness regarding their ethical practices, and introduce and

promote green banking initiatives. Therefore, banks must embrace a holistic

ethical and green framework in line with broader corporate responsibility, and

move beyond compliance with laws and regulations.

24
Tan Hui Boon, et al. (2013). “Green and Ethical Banking: Demand and Supply Perspectives
from Bankers, Corporations, and Heads of Households in Malaysia”, Bankers Journal Malaysia,
No.141, June, pp.12-20.
 39

Md. Masukujjaman and Serena Aktar (2013)25 highlighted the green

banking road map in Bangladesh and the status of its implementation. Further,

they explored the activities of commercial banks in comparison with global green

banking initiatives. The study is analytical in nature based on the secondary data.

The secondary data were collected from newspapers, magazines, internet,

commercial banks’ websites, Bangladesh Bank’s website and reviews. An

intensive desk research was undertaken to collect published data. The collected

data were analyzed in the perspective of progress and adequacy of green banking

activities in Bangladesh compared to the global endeavours. The study highlights

the fact that banks in Bangladesh are beginning to understand the importance of

introducing green banking into their mainstream operations. Still, no bank in

Bangladesh has been found in the UNEPs signatories of the Equator Principles.

Though the banks in Bangladesh are in the intensification phase passing through

the foundation phase within the time frame, some banks are yet to stand on their

feet.

Md. Mustafizur Rahman, et al. (2013)26 analyzed the prospects of green

banking in Bangladesh with the aim of promoting green banking among

beneficiaries and in the banking sector. The objectives of the study are: to study

the management of environmental risk and identify opportunities for innovative

environment friendly financial products; to study environmental and control

regulations regarding green banking in Bangladesh; to design proper

25
Md. Masukujjaman and Serena Aktar (2013). “Green Banking in Bangladesh:
A Commitment towards the Global Initiatives”, Journal of Business and Technology, Vol.VIII,
Nos.1 and 2, January-June and July-December, pp.17-40.
26
Md. Mustafizur Rahman, et al. (2013). “Green Banking Prospects in Bangladesh”, Asian
Business Review, Vol.2, No.2, pp.59-63.
 40

environmental management system in the investment projects; and to develop

financial products and services that support commercial development with

environmental benefits. The study is mainly based on secondary data collected

from several reliable sources. The study concluded that if banks formulate their

work plan, then it will be possible to complete implementation of green banking

activities in Bangladesh. It will help the earth in regaining green environment and

ensure safe residence for the off-springs.

Neetu Jain (2013)27 studied the practical implications of the concept of

green banking. The main objective of the study is to find out the challenges faced

by the banks, which have implemented the concept of green marketing. Data were

collected through personal interviews. Delphi method has been used to collect the

data. The steps taken by the various Indian banks are worth acknowledging and

appreciating. Their work towards a greener environment is showing up good

results. This will result in lowering of costs and would ultimately lead to rise in

profits.

Md. Maruf Ullah (2013)28 explored the Bangladesh Bank policy guidelines

for green banking and compared the green banking practices of the SCBs, SDBs,

PCBs and FCBs. The study is mainly based on extensive literature review and

secondary data. To analyze the status of green banking practices of the banks, the

various components of green banking have been brought into light. The results

27
Neetu Jain (2013). “Green Banking: A Ground Breaking Initiative for Sustainable
Development”, International Journal of Logistics & Supply Chain Management Perspectives,
Vol.2, No.1, January-March, pp.166-168.
28
Md. Maruf Ullah (2013). “Green Banking in Bangladesh: A Comparative Analysis”, World
Review of Business Research, Vol. 3, No. 4, November, pp.74- 83.
 41

revealed that inspite of lot of prospects in green banking; SCBs and SDBs are far

behind in the implementation of green banking. Only some of PCBs and FCBs

have initiated green banking. The study concluded that green banking is really a

good way for people to get more awareness about global warming. Each

businessman must contribute a lot to the environment and make this earth a better

place to live.

Fayez Ahmad, Nurul Mohammad Zayed, and Md. Ashraf Harun (2013)29

identified some issues of green banking of Bangladesh. The core objective of this

study is to find out the factors influencing bankers to adopt green banking. The

primary data were collected with the help of questionnaire. The target population

of this research work is all the male and female who do job in bank as officers. By

adopting stratified sampling technique, 300 samples were chosen in branches of

the banks in Dhaka city. The results of the factor analysis reveal that six factors

namely economic factor, policy guideline, loan demand, stakeholder pressure,

environmental interest, and legal factor are the major influencers. These factors

have combined variance of 65.25% of the decision regarding the adoption of

green banking by the commercial banks.

Vijay Pulicheri and Sangepu Rajashekhar (2013)30 made an attempt to

know the concept of green banking; to know the evolution of technologies

towards green banking services; to give suggestions to improve green banking

29
Fayez Ahmad, Nurul Mohammad Zayed and Md. Ashraf Harun (2013). “Factors behind the
Adoption of Green Banking by Bangladeshi Commercial Banks”, ASA University Review, Vol. 7,
No. 2, July-December, pp.241-255.
30
Vijay Pulicheri and Sangepu Rajashekhar (2013). “Green Banking Services for Sustainability”,
International Journal of Research in Computer Application & Management, Vol.3, No.11,
November, pp.132-136.
 42

services in India; and to create awareness about green banking and its benefits to

the society. Banks like SBI, PNB, Corporation Bank, ICICI Bank, HDFC Bank,

HSBC, etc. are covered in this study. It is an exploratory research. Chronological

developments in green banking are studied with respect to expansion of branches,

implementation of computerization at different levels, opening of ATMs and

green banking services. The study concluded that technological advancements

have brought in green banking in India over a period which is certainly healthier

in smooth and efficient functioning of the banks as also leading to customer

satisfaction and clean environment.

Nirmala Dorasamy and Monal A. Abdel-Baki (2014)31 analyzed the gap

between the newly developed perceptions of Egyptian savers/borrowers on the

one hand and the conduct of bankers on the other hand. They introduced a two-

stage model. In the first stage, instead of adopting mainstream ethics and

sustainability indexes, they administered a field survey in order to develop a

stakeholder-centric view of the requisites of ethical banking principles, lending

policies with human, socially, and ecologically responsible criteria, ethical

screening, risk minimization, and the maximization of financial returns. The

second stage of the model gauges the performance of Egyptian banks. The study

suggests that banks could adopt ethical and responsible mechanisms and policies

without sacrificing shareholders’ wealth. The banks are indeed more tilted

towards the stakeholder model, in comparison to the other low performing banks.

Since banks play a significant role in society, they need a value system that is
31
Nirmala Dorasamy and Monal A. Abdel Baki (2014). “The Inception of Ethical Banking: An
Imperative Transformation in Post-revolution Egypt”, International Business & Economics
Research Journal, Vol.13, No. 3, May-June, pp.513-524.
 43

congruent with that of the society at large. Social self-regulation at the bank level

can enforce better conduct and promote social change in desirable directions,

since those responsible for enforcement would have greater power and authority,

better access to information and easier interpretation of violated rules. Further, by

making their operations society-oriented, banks invariably align their activities

and programmes with their value statement. This can help to close the gap

between stakeholders’ expectations, regulatory requirements, and profitability by

focusing on empowering people, promoting innovation, and improving efficiency

which extends beyond mere compliance with regulations.

Shilpika Laxman (2014)32 explored the importance of green banking and

forms extensive review of related literature. The objectives of the study are: to

know about green banking and its advantages; to introduce some potential green

banking products; and to suggest ways to promote and adopt green banking in

India. The data were collected by discussion with bankers, academicians,

industrialists as well as from documents, websites, journals, magazines, research

articles and other papers. The study found out that there have not been many

initiatives in this regard by the banks and other financial institutions in India. The

Indian banking sector is still at the initial stage of green banking. The study

suggests that banks should establish a separate green cell; formulate

environmental risk management policy guidelines; every bank should introduce e-

banking facilities such as online banking, mobile banking, phone banking, SMS

banking, ATM network, etc; banks should finance more and more to environment

32
Shilpika Laxman (2014). “Green Banking: A Need to Focus”, Indian Streams Research Journal,
Vol.4, April, pp.1-5.
 44

and social friendly products such as solar, bio-gas, wind, hydro, effluent treatment

plants, CNG conversion loan, other renewable energy projects, etc; banks should

conduct energy audits and review equipment purchases and disposal policies and

practices; and encourage, motivate, and energize the workforce to follow the

green path.

Sonika Nagpal (2014)33 stated that the increased deterioration of the

ecosystem due to the globalization and industrialization process has raised

concern for environmental protection around the world. This has created a

pressure for the adoption of green practices on the manufacturing as well as the

service sector. Hence, green banking is increasingly gaining importance. Though,

banking sector contributes lesser towards environmental deterioration than the

manufacturing industry, due to the large size the banking industry, its contribution

cannot be ignored. The paper concludes with implications for the bankers and

policy makers to speed up the process of effective implementation of green

banking practices.

Asma Jarin, Mohammad Rahat and Mohammad Abul Kashem (2014)34

embarked on the environmental issues of green banking. The authors put together

the approaches of eco-banking in the form of theoretical model. The study

employed both extensive literature and secondary data. Secondary data were

collected from banks and websites. The authors observed the contents available to

33
Sonika Nagpal (2014). “Green Banking Strategies and Initiatives in India: A Conceptual
Framework”, Asia Pacific Journal of Marketing & Management Review, Vol.3, No.1, January.
34
Asma Jarin, Mohammad Rahat and Mohammad Abul Kashem (2014). “Eco-Banking Strategies
for Competitive Advantages”, European Journal of Business and Management, Vol.6, No.3,
pp.84-91.
 45

construct the strategies and checked conjectural relationship of the factors to form

a theoretical model. Banks have the options to employ the eco-banking model as

business model without any additional postponement with special reference to

positive correlation between environmental performance and financial

performance.

Tofayel Ahmad, et al. (2014)35 introduced a secured approach named

“intranet" for inter-communications. Broad band intranet has some workflow to

handle the day to day activity easily and within short time like, current economic

and financial news from different online news source, graphs and charts

representing the economy of the country, organizational phone index,

organizational chart, publications, some user interactive flows like survey,

question and answer, some workflows such as leave application, document

management system, e-noting system, meeting room booking, transport

requisition, mailing facility, links to some in-house running almost all applications

and digital version of paper forms which are used by employees.

Mamta Jain, Shailja Singh and Mathur (2014)36 made an attempt to

enumerate effective methods for green banking; and to create awareness about

green banking. The data were obtained from journals, books, magazines, articles

and reports. The study reveals that there is negligible awareness of green banking

among bank’s staff and customers. There is the utmost need to create awareness,

35
Tofayel Ahmad, et al. (2014). “Intranet: A New Approach for Communication: Green Banking
Aspects in Bangladesh Bank”, Proceedings of the 2014 International Conference on Industrial
Engineering and Operations Management, Bali, Indonesia, January 7-9.
36
Mamta Jain, Shailja Singh and Mathur, T.N (2014). “Green Banking: A Practical Approach for
Future Sustainability”, Trans Asian Journal of Marketing & Management Research, Vol.3, No.1,
January, pp.12-21.
 46

implement and follow green banking as much as possible in today’s business world

of innovative technologies so as to make the environment human friendly and

enrich sustainability. Majority of banks identified risk of failure of business to peers

and lack of RBI mandates as main barriers to adopt sustainability. The other reasons

identified are non-availability of skilled employees, insufficient budgets to train

employees, complex reporting frameworks and lack of interest shown by customers

and investors. None of Indian banks adopted equator principles even for the sake of

records. None of them is signatory to the UNEP Financial Initiative statement.

Md. Sharif Hossain and Md. Tanvir Ahmed Kalince (2014)37 studied the

impact of green banking on banks’ performance using cross section data of 45

banks in the year 2012. Six different variables namely, loans and advances, deposits

and other accounts, paid-up capital, investments, green banking, and profit after tax

are used in this study. The data were collected from banks’ annual reports, banks’

disclosure on green banking, banks’ websites, Bangladesh Bank’s annual reports,

articles and journals. The study concluded that banks must take new initiatives and

promote different green banking products. They must adopt different environment

friendly policies. They should take effective green banking strategies to make green

banking successful. This will create sustainable growth for them in the long run,

which results in sustainable green economy.

37
Md. Sharif Hossain and Md. Tanvir Ahmed Kalince (2014). “Green Banking Nexus Banks’
Performance”, Swiss Journal of Research in Business and Social Sciences, Vol. 1, No.3, pp. 1-16.
 47

Vikas Nath, Nitin Nayak and Ankit Goel (2014)38 highlighted the green

rating standards given by RBI, the World Bank’s environmental and social norms,

and the initiatives taken by public and private sector banks. For analyzing the

green banking initiatives of the Indian banks, top performing banks are selected in

both public and private sectors. Number of banks promised about investing in

green businesses and dropping their greenhouse emissions, but growing business

in the banking sector meant more employees working in the offices around the

clock on more computers, demanding more electricity, which was often created by

burning carbon dioxide and more air travel which were the key sources of global

warming. Indian banks should expand the use of environmental information in

their business operations, credit extension and investment decisions. This

endeavour will help them proactively improve their environmental performance

and create long-term values for their business.

Sahila (2014)39 stated that environmental performance is the correlation

between the organization and the environment. It is all about striking a balance

between organizational activities, practices and processes and their effect on

environment. It includes the environmental impact of the organizational process,

the environmental implications of its products and services, the recovery and

processing of products and the environmental effects on resources consumed.

Therefore, the banks should play a proactive role to take environmental and

ecological aspects as part of their lending principles.

38
Vikas Nath, Nitin Nayak and Ankit Goel (2014). “Green Banking Practices: A Review”,
International Journal of Research in Business Management, Vol. 2, No.4, April, pp. 45-62.
39
Sahila, C (2014). “Green Banking in India”, International Journal of Social Science &
Interdisciplinary Research, Vol. 3, No.12, December, pp. 157-162.
 48

Ritu (2014)40 highlights methods, opportunities, challenges and benefits of

green banking. The author says that there is an urgent need to create awareness

and follow green banking in today’s business world so as to make the

environment human friendly. For effective adoption of green banking, the RBI

and the Indian government should play a major role and formulate green policy

guidelines and financial incentive. The author stated some suggestions to

encourage green banking: communication through press; construction of websites

and spread the news; imparting education through e-learning programmers;

making green banking as part of annual environment reports; training and

development of relevant skills among bank employees; formulating innovative

financial solutions to incorporate environmental perspective; and introduction of

green funds for customers to invest in environment friendly projects.

Sunmista and Sathana (2014)41 made an attempt to study the green banking

initiatives taken by commercial banks in India; to study the perception of the bank

employees about the green banking initiatives; and to offer suggestions for

improving the green banking services of commercial banks. The study is descriptive

in nature. By using structured interview schedule, the primary data were collected

from 64 bank employees working in the public sector banks in Sivakasi. The results

showed that banks are taking new initiatives and promoting different green banking

products. They adopt different environment friendly policies. The study suggests that

bank employees must consider green banking as a necessity rather than desirability.

40
Ritu (2014). “Green Banking: Opportunities and Challenges”, International Journal of
Informative & Futuristic Research, Vol.2, No.1, September, pp.34-37.
41
Sunmista, K.J and Sathana, T (2014). “Green Banking Initiatives of Commercial Banks
Employees Perspectives”, Global Journal for Research Analysis, Vol.3, No.12, December, pp.1-4.
 49

Komal Singhal, Krishna Singhal and Monika Arya (2014)42 made an attempt

to study the concept of green banking; to know the ways in which banks can protect

the environment; and to highlight the green banking initiatives of the commercial

banks. The data were collected from documents, websites, journals, research articles

and other papers. Banks play a major role to make the planet a better place to live in.

Green bank affects socially responsible behaviour of other business. Green banking

helps in saving the energy and water consumption and also appraises banks in the

eyes of environment supporting customers. Today, Indian banks are taking efforts to

go green through various green offerings to their customers. The authors concluded

that Indian banks need to set their long-term green goals, green strategies and execute

their greening activities in a phased manner.

Laxmi Mehar (2014)43 made an attempt to study the concept of green bank

and its evolution in India; to study the green banking approaches of the Indian

banks; to know the green banking benefits to customers; to identify the steps

necessary to adopt green banking; and to create awareness about green banking

among the general public, customers and bank employees. The study is based on

secondary data. The secondary data were collected from text books, journals and

internet. The author states that the Indian banks are still taking baby steps into a

much evolved form of banking. There is a lot of scope for all the banks but only a

few have initiated green banking. In order to contribute better towards sustainable

banking, financial institutions and the government have to make changes in their

42
Komal Singhal, Krishna Singhal and Monika Arya (2014). “Green Banking: An Overview”,
Asian Journal of Multidisciplinary Studies, Vol.2, No.6, June, pp.196-200.
43
Laxmi Mehar (2014). “Green Banking in India”, International Journal of Applied Research
and Studies, Vol.3, No.7, July, pp.1-7.
 50

policies. Educating the masses about this form of banking will be a good way to

start.

Fortune Ganda and Ngwakwe (2014)44 reviewed the energy and carbon

reduction practices of South African banks. Using a desktop approach, energy and

carbon management practices were collected from the sustainability reports of

South African banks. These practices were compared to various international

regulations that govern energy together with carbon policies and practices in

financial institutions. The collected data were presented in tabular format to

indicate diversified energy and carbon reduction practices of the South African

banks. The energy and carbon reduction practices of the South African banks

show growth and potential in making progression that attains the objective of

sustainable development. Moreover, establishing strong relations with other banks

on energy consumption matters, continual review of sustainability practices in line

with climate change matters along with building businesses which emerge from

climate change issues should form the banks’ top priority. The paper concluded

that the operations of the South African banks are imbued with energy efficiency

and carbon reduction practices.

Jasdeep Kaur (2014)45 made an attempt to know green banking and its

advantages; and to suggest ways to promote green banking in India. The data

were collected from journals, magazines and research articles. The following

suggestions can be adopted by the banks to promote green banking in India: make

44
Fortune Ganda and Ngwakwe, C (2014). “Energy and Carbon Reduction Practices in South African
Banks”, Environmental Economics, Vol.5, No.4, pp.8-16.
45
Jasdeep Kaur (2014). “Green Banking in India”, Indian Journal of Applied Research, Vol.4,
No. 1, January, pp. 27-28.
 51

aware of customers about green banking through their websites; promote different

forms of electronic banking; create customers’ awareness through the media;

carbon footprint reduction by saving energy and paper; carbon footprint reduction

by offering transportation services for bank employees; provide environment

friendly rewards to customers; financing environment-friendly projects; join

hands in environment preserving causes; and focus on greening IT infrastructure.

With increasing concern about global warming and conserving environment,

Indian banks are becoming more responsive towards the green aspirations of their

customers. New initiatives like green products and new environment friendly

policies are adopted. But still there is a long way to go.

Sakib B. Amin (2014)46 stated that sustainability has been recognized as a

key objective of developing market economies. For the financial sector, this

represents both a demand for greater social and environmental responsibility.

Green finance as part of green banking makes great contribution to the resource

efficient and low carbon industries. This paper begins with the wider concept of

green banking and highlights the green banking programmes adopted in

Bangladesh. The significance of banks in sustainable development cannot be

overemphasized. Bangladesh has experienced some positive developments in

green banking. The author suggested some measures such as coordination among

the concerned authorities, awareness and capacity building, concentration on

sectoral lending policies and procedures, and shifting of some industries to proper

locations for sustainable banking.

46
Sakib B. Amin (2014). “Sustainable Green Banking: The Case of Bangladesh”, Janata Bank
Journal of Money, Finance and Development, Vol. 1, No.1 June, pp.91-96.
 52

Shalini Dubey (2014)47 studied the awareness level of customers towards

green banking and adoptability level of customers of green banking services. The

primary data were collected through structured questionnaire. The secondary data

were collected from websites, newspaper, articles, journals, magazines, etc. The

study was conducted in Agra city. 117 customers of the public sector banks were

selected for this study. The study finds that green banking is still in infancy stage

for public sector banks in Agra city. Customers are not very much aware of green

banking. Majority of the customers are adopting green banking without having

awareness of it. The main reason for customers’ low awareness is that banks are

not promoting green banking as much as they are promoting other banking

services like e-banking. Therefore, the banks should change their mindset of profit

and adopt the new concept of planet-people-profit. Banks should integrate the

environment friendly aspect in their normal banking activities. Banks should

promote green banking by organizing seminars and conferences to educate green

banking and its benefits to their customers and the society. The banks should offer

more flexible loans to commercial clients who invest in environment friendly

projects. Banks should have a separate environmental management department to

deal with green investment and environmental risk management. These will help

the banks and customers in respect of green banking and improving the overall

quality of green banking services.

47
Shalini Dubey (2014). “A Study on Customers’ Demographic Profile and Adaptability of Green
Banking Services with Special Reference to Public Sector Banks of Agra”, Journal of Business
Management, Commerce & Research, Vol.II, No.8, June, pp.28-38.
 53

Sudhalakshmi and Chinnadorai (2014)48 made an attempt to determine the

awareness level of customers about green banking in Coimbatore city; to analyze

the level of satisfaction of the customers towards green initiatives of private sector

banks; and to study the various problems faced by the customers of green banking.

The primary data were collected from the 100 customers with the help of

questionnaire. Green banking is still a major issue and can play an important role

in the development of India. Therefore, banks have to work more as compared to

foreign banks as they are playing an important role in maintaining the

sustainability of their country.

Sreesha Ch (2014)49 identified the initiatives taken by banks to promote

environmental sustainability and determined the difference in the initiatives of the

private and public sector banks in India. The study is descriptive in nature. The

primary data were collected from private and public sector commercial banks. The

secondary data were collected from websites of banks, annual reports of RBI,

journals, etc. The author states that even though the Indian banks identified the

need for greening their activities, they are running behind their counterparts as of

developed economies. They have started adopting green practices, but still a lot of

channels are unutilized by the Indian banks for greening their activities. The study

concluded that public sector banks have taken more green banking initiatives than

private sector banks. For maintaining environmental sustainability, banks should

48
Sudhalakshmi, K and Chinnadorai, K. M (2014). “A Study on Customers’ Awareness on Green
Banking Initiatives in Selected Private Sector Banks with Special Reference to Coimbatore City”,
The International Journal of Business & Management,Vol.2, No.4, April, pp.160-163.
49
Sreesha Ch (2014). “A Study on Green Banking Initiatives of Selected Private and Public Sector
Banks in India”, International Journal of Research, Vol.1, No.7, August, pp.807-814.
 54

expand the use of environmental information in their business operations, credit

extension and investment decisions.

Saleena (2014)50 studied the strategic aspects of green banking,

opportunities and challenges faced by banks in India. The objectives of the study

are: to identify the various strategies for making bank with green; to identify

different levels of green banking initiatives taken for making environmental

sustainability; to compare the green banking initiatives taken by SBI and ICICI

Bank; and to find out the opportunities and challenges faced in green banking in

India. The study is mainly based on primary data. The primary data were collected

from the customers of both SBI and ICICI Bank. The secondary data were collected

from website, annual reports of RBI, journals, etc. In a rapidly changing market

economy where globalization of markets has intensified the competition, banks

should play a proactive role to take environmental and ecological aspects as part of

their lending principle which would force industries to go for mandated investment

for environmental management, use of appropriate technologies and management

systems. The banks should work for sustainable development.

Rajesh and Dileep (2014)51 studied the role of banks in sustainable

economic development through green banking. The study was based on secondary

data obtained from the reports of various banks, seminars and workshop

information and other information published on the banks and websites. The study

concluded that banks contribute to ecological footprint directly and indirectly

50
Saleena, T. A (2014). “Go Green: Banking Sector's Perspective”, Abhinav: National Monthly
Refereed Journal of Research in Commerce & Management, Vol.3, No.11, November, pp.226-32.
51
Rajesh and Dileep (2014). “Role of Banks in Sustainable Economic Development through Green
Banking,” International Journal of Current Research and Academic Review, Vol. 2, No.12.
 55

through investment/lending in their customer enterprises. Before financing a

project, banks must see its environmental risks and ensure the project players have

environmental safety measures in their plans, including recycling facilities or

smoke and gas arresting units.

Shikha Agrawal (2014)52 made an attempt to understand the environmental

development concept; to understand RBI guidelines with reference to green banking;

to understand the practices of top five Indian banks with reference to green banking.

The study adopted random sampling and the target respondents are customers from

top 5 banks namely State Bank of India, ICICI Bank, HDFC Bank, Punjab National

Bank and Bank of India. The primary data were collected with the help of

questionnaire from 100 customers from Allahabad district. The findings of the study

showed that the respondents are not aware of green banking initiatives of these banks.

The study suggests that the banks should report in their annual reports about the

initiatives taken for sustainable development. The banks should upload the

information on these aspects in their websites. Banks should motivate the employees

to follow environmental friendly practices by giving incentives. In vision statement,

the banks should include the issues related to sustainable development.

Ramila and Gurusamy (2015)53 studied the impact of green banking

products such as RTGS, NEFT, ECS, mobile banking, ATM and POS terminal

transactions on the profitability of public sector banks. The study is empirical in

52
Shikha Agrawal (2014). “Green Banking in India: An Empirical Study of Commercial Banks”,
Voice of Research, Vol. 2, No.4, March, pp.58-60.
53
Ramila, M and Gurusamy, S (2015). “Impact of Green Banking Initiatives Adopted by Public
Sector Banks on Profitability”, Samzodhana-Journal of Management Research, Vol.5, No.2,
October, pp.60-68.
 56

nature. Sample period of 7 years is considered for RTGS, NEFT, ECS and mobile

banking products and 4 years for ATM and POS terminal. The study is based on

secondary data accessed from RBI website. The analysis shows that the ECS and

ATM transactions play a major role in impact on the profitability of public sector

banks. The other green banking initiatives such as RTGS, NEFT and mobile

banking impact the profitability of the public sector banks but it is not that much

effective when compared with ECS and ATM transactions. Thus, the green

banking initiatives adopted by the public sector banks has impact on their

profitability.

Tripti Chopra and Punit Kakrecha (2015)54 studied several aspects of green

financing with respect to Indian scenario; to study the green banking practices

adopted by banks; to study the feasibility of green banking practices; and to study

the perception of customers regarding green banking. The study was conducted in

the major banks in Indore. The primary data were collected with the help of

questionnaires from 397 customers who have savings bank accounts. The findings

showed that by introducing ATMs, mobile banking, internet banking, tele-banking,

green channels, deposit from ATM, e-gallery, etc. banks are doing their part to

enhance green practices. The study makes it very clear that people have started

showing trust in green practices due to their feasibility. The only need is to spread

awareness and make the system more user-friendly to gain the trust of customers

towards green banking.

54
Tripti Chopra and Punit Kakrecha (2015). “Green Finance: The Practices of Banks and
Perspective of Customers”, International Journal of Research: Granthaalayah, Vol.3, No.5, May,
pp.27-38.
 57

Ahuja (2015)55 deals with the status of Indian banks in respect of green

banking and states that though “go green” mantra is essential for emerging

countries like India, significant efforts have not been taken adequately. Banks are

required to include their green aspect in the lending principle. Every step taken

today will mean a better global environment in future. Hence, a policy measure to

promote green banking is needed in India. Indian banks are running behind time in

the adoption of this green phenomenon.

Raad Mozib Lalon (2015)56 analyzed the green banking activities of the

commercial banks of Bangladesh. The main objective of the study is to get

acquainted with the green banking practices of the banking institutions of

Bangladesh. They tried to focus on the process of adopting green banking policy,

environmental issues and in-house activities. They make a comparison among the

green banking practices of the banks. They tried to find out the phases through

which green house initiatives were implemented. The results of the study revealed

that most of the PCBs and FCBs adopted the policy except SCBs and SDBs who

have not taken such steps yet. Bangladesh Bank not only gives the policy but also

provides technical supports for green banking adoption. The author suggests that

Bangladesh Bank must monitor the green banking practices of the banks.

Government should encourage and try to create awareness about green banking

among people.

55
Ahuka Neyati (2015). “Green Banking in India: A Review of Literature”, International Journal
for Research in Management and Pharmacy, Vol.4, No.1, pp-1-6.
56
Raad Mozib Lalon (2015). “Green Banking: Going Green”, International Journal of Economics,
Finance and Management Sciences, Vol.3, No.1, pp.34-42.
 58

Md. Amirul Islam and Md. Kamruzzaman (2015)57 made an attempt to

show green banking practices of the commercial banks; to focus the major green

banking practices; and to show of banks’ in-house green activities. The study is

based on secondary data and these data were collected from annual reports of

Bangladesh Bank, daily newspaper, journals, articles, websites, etc. The study

finds that banks already have entered into the second phase, having an

implementation deadline for green banking activities. The authors suggest that

banks need to concentrate on sector specific environmental policies. They need to

formulate strategies to design specific policies for different environmental

sensitive sectors. Banks must be proactive in building internal resources and

capacity to identify, appraise and close sustainable energy finance deals.

Kanak Tara, Saumya Singh and Ritesh Kumar (2015)58 made an attempt to

study the green banking philosophy adoption by the banks. The study mainly

includes literature review from secondary data. Discussions were also held with

branch managers to collect some first hand information. The authors stated that

adoption of green approach is more than just becoming environment-friendly as it

is associated with lots of benefits like reduction in the risk as well as the cost of

the bank, enhancement of banks reputations and contribution to the common good

of environmental besides enhancing the reputation of the bank. Green banking

serves the commercial objective of the bank as well as the corporate social

responsibility. Therefore, it is important that Indian banks should realize their

57
Md. Amirul Islam and Md. Kamruzzaman (2015). “Green Banking Practices in Bangladesh”,
IOSR Journal of Business and Management, Vol.17, No.4, April, pp.37-42.
58
Kanak Tara, Saumya Singh and Ritesh Kumar (2015). “Green Banking for Environmental
Management: A Paradigm Shift”, Current World Environment, Vol. 10, No.3, pp.1029-1038.
 59

responsibilities towards the environment as well as the society so as to compete

and survive in the global market.

Jeena Gupta (2015)59 made an attempt to identify the various initiatives

taken towards green banking and environment sustainability by commercial banks

in India; and to conduct SWOC analysis of green banking practices of the

commercial banks. The scope of the study is limited to analyze the green banking

initiatives taken by the Punjab National Bank, State Bank of India, ICICI Bank in

Mandi district of Himachal Pradesh. The secondary data were collected from

various books, journals, research papers, annual reports, government reports,

websites, etc. It can be concluded that banks are taking new initiatives and

promote different green banking products. The study suggests that banks should

adopt environment friendly practices which ensure the efficient use of resources.

Bank employees should consider the green banking initiatives as primary work.

The following strategies are important for the green banking sector: Banks should

change their daily routine work through the paperless banking, online banking,

mobile banking, mass-transportation system, etc. Banks must organize training

program on environment sustainable development program to their employees.

Bank employees must be given orientation on evaluation of green finance projects

like renewable energy projects, clean water supply, bio-gas plants, etc.

Gobinda Deka (2016)60 discussed the meaning and role of ethical banking;

highlighted the ethical banking practices adopted by State Bank of India towards

59
Jeena Gupta (2015). “Role of Green Banking in Environment Sustainability: A Study of
Selected Commercial Banks in Himachal Pradesh”, International Journal of Multidisciplinary
Research and Development, Vol.2, No.8, August, pp. 349-353.
60
Gobinda Deka (2016). “Ethical Issues of Banks towards the Environment: A Study on Green
Practices of State Bank of India in Assam”, Proceedings of the XVII Annual International
Seminar, January, pp.1-19.
 60

the environment; and studied the adoption level of green banking practices by the

customers of the SBI in Assam. For collecting primary data, structured

questionnaires have been used and 486 customers of State Bank of India from

selected four districts of Assam have surveyed using convenience method of

sampling. Secondary data have been collected from different relevant books,

journals, newspapers and published reports of the State Bank of India and Reserve

Bank of India. The study is divided into two parts; part one studied the

environment-friendly practices adopted by the SBI itself at national level and

other part studied the green banking practices introduced by the bank to be

practiced by the customers in Assam. It has found that there is lack of awareness

among the customers as well as the bank employees regarding green banking

practices adopted by the bank. This indicates that people are now shifting their

banking habits towards alternative green banking practices. Not a single online

user has chosen traditional banking as Rank-I banking system. On the other hand

44 per cent of them favours ATM as first preferred banking practice and 37 per

cent go for online banking. As the world faces a great challenge of environmental

degradation during the process of economic development, banking sector as

responsible corporate citizen should be ethical enough towards the environment

along with their normal business ethics to the customers, employees and the

society as a whole. There is more scope for banks and they can not only save our

earth, but can transform the whole world towards energy conscious.
 61

Shaumya and Arulrajah (2016)61 explored the green banking practices in

Sri Lanka and developed an instrument to measure the green banking practice.

Data were collected from the secondary sources, mainly from the annual reports

of the selected banks in Sri Lanka and content analysis was applied. The primary

data were collected from 155 bank staff. The study identified and explored 98

green banking practices among the four private sector commercial banks in Sri

Lanka. A 16 items instrument with four key dimensions was developed to

measure green banking. The secondary data were collected mainly from the

published annual reports of the selected private banks such as Commercial Bank

of Ceylon PLC, HNB PLC, Sampath Bank PLC and Seylan Bank PLC. The

collected data were analyzed by using systematic content analysis. The types and

number of green banking practices were identified and counted respectively from

the collected data through content analysis. The study has practical implications.

This study promotes and motivates green banking practices of banking sector in

Sri Lanka and fills the knowledge gaps stated in this study. Through this study, the

employees of the banks will become knowledgeable about green banking practices

and successfully involve in implementing green banking practices in future.

Finally, this study may contribute to environmental protection and management

by exploring green banking practices in Sri Lanka.

61
Shaumya, K and Arulrajah, A.A (2016). “Measuring Green Banking Practices: Evidence from
Sri Lanka”, Proceedings of the 13th International Conference on Business Management,
pp.999-1023.
 62

Shailendra Yadava and Viswanadham (2016)62 studied the green banking

concepts and its advantages and challenges. The study states that increased carbon

emissions and reckless development without paying attention to environment, led

to climate changes. Indian banks need to create aware about green banking

practices among managers and personnel through weekly green news,

publications, newsletters, e-learning programs, event meeting, media, websites

and road shows. If Indian banks desire to enter into global markets then it is

important for them to recognize their environmental and social responsibilities.

Therefore, Indian banks should adopt effective sustainable strategies for green

banking.

Tejinder Pal Singh Brar (2016)63 examined the perspective of public and

private sectors banks towards green technologies. In order to take bankers’ view

point, a random sample of 50 respondents who were working as IT managers,

front line managers or branch managers has been taken for the study. This study

primarily concentrates on banks operating in Gurgaon region and that are

providing e-banking services for more than one year. There were number of

aspects that affect adoption of green technologies by banks like enhancing

environmental, social and financial well being of communities, choice for

customers and businesses, active lending to sustainable businesses and also green

credit being provided to the customers. In developing countries like India, there

62
Shailendra Yadava and Kasi Viswanadham (2016). “Green Banking in India: An Innovative
Initiative for Sustainable Development”, International Journal of Academic Research, Vol.3,
No.1, March, pp.88-96.
63
Tejinder Pal Singh Brar (2016). “Green Banking Adoption: A Comparative Study of Indian
Public and Private Sector Banks”, Envision- International Journal of Commerce and Management,
Vol.10, pp.60-67.
 63

have not been many initiatives in this regard by banks. It was found that private

sector banks were ahead in terms of offering online services and using online

mediums for providing awareness to customers. On the other hand, public sector

banks were less motivated in terms of using and motivating customers about green

technologies. It was also found that banks still depend upon paper based mediums

for advertising their products and services.

Mahfuzur Rahman and Suborna Barua (2016)64 made an attempt to study

the status of green banking policy implementation by the commercial banks

operating in Bangladesh; to identify the factors leading to success and failure of

the banks in green banking; and to identify areas of further intervention for better

implementation of the policies. The assessment is made primarily by using the

following criteria: bank-wise weighted average progress level across all policies

of the GBG and policy-wise level of progress across all banks. The study carried

out an intensive survey of 42 scheduled banks operating in Bangladesh where

each bank was studied for 15 days separately. Among the banks, 30 are domestic

private commercial banks, 6 are state owned banks, and 6 are foreign commercial

banks. Secondary information was collected from banks’ annual reports and their

green banking reports submitted to the central bank. The study finds that

performance of banks in Bangladesh GBG implementation is not very satisfactory

although a substantial progress was expected. The findings of the present study on

the phase-wise implementation data show that the implementation of the

19 policies in three phases remained fragmented and policies related to paper-

64
Mahfuzur Rahman, S.M and Suborna Barua (2016). “The Design and Adoption of Green
Banking Framework for Environment Protection: Lessons from Bangladesh”, Australian Journal
of Sustainable Business and Society, Vol. 2, No. 1, March, pp.1-19.
 64

work or desk-based work have been implemented quickly while field level

implementation related policies are less prioritized by the scheduled banks.

Moreover, it is evident that state-owned banks are the worst performers with the

lowest implementation level of the GBG while foreign banks are the top

performers and the domestic private banks are in the second place. The banks

have reported a number of factors causing partial implementation of GBG. Among

them, lack of awareness, high implementation cost, unfamiliarity of the concept,

and relatively poor utilization of human resources. Therefore, a range of education

and awareness campaign should be organized by Bangladesh Bank and scheduled

banks for employees and customers. Bangladesh Bank may also periodically

examine the resources committed for GBG implementation in the scheduled banks

that can ensure self-sufficient green banking divisions in banks. The study

concluded that for suitable existence of the future earth, a sacrifice today is

needed, and this has to be properly communicated to the scheduled bank

authorities.

Tejinder Pal Singh Brar (2017)65 examined the perspective of public and

foreign sector banks towards adoption of green technologies. In order to take

bankers’ view point, a random sample of 60 respondents who were working as IT

managers, front line managers or branch managers were selected. This study

primarily concentrates on banks operating in Jalandhar and Ludhiana region. It

was found that foreign banks were ahead in terms of offering online services and

using online mediums for providing awareness to customers. On the other hand,

65
Tejinder Pal Singh Brar (2017). “Green Banking Initiatives: A Study on Bankers’
Consciousness”, International Journal of Environmental and Social Sustainability, Vol.2, March
2016-February 2017, pp.9-15.
 65

public sector banks were less motivated in terms of using and motivating

customers about green technologies. It was found that banks still depend upon

paper based mediums for advertising their products and services. There were

number of aspects that affects adoption of green technologies by banks like

enhancing environmental, social, and financial well being of communities, and

choice for customers and businesses, active lending to sustainable businesses and

also green credit being provided to the customers. But in countries like India,

there has not been much initiative in this regard by financial institutions. In order

to properly implement green banking, banks have to work closely not only with

government but also with regulators, customers, NGO’s and business

communities.

Garima Sharma (2017)66 reviewed the status of green banking in India;

and to comparatively studied the green banking initiatives in India and abroad.

The study is mainly based on the secondary sources of information. The author

made clear that to attain sustainable development in the country imparting

education and creating awareness was necessary. There are only small group of

banks in India that lead in environment aspect. Out of total people who were using

online facilities nearly three fourth of them were unaware of the term green

banking. The researcher affirms that the main obstacle in green banking was lack

of education among the public. The study suggests that imparting knowledge and

promoting day to day use of electronic payments can support the country to be

environment friendly. Many guidelines as well as principles were issued by the

66
Garima Sharma (2017). “Conceptual Analysis of Green Banking in India and Abroad”, National
Journal of Arts, Commerce & Scientific Research Review, Vol.4, No.1, January-June, pp.75-81.
 66

government towards green banking but their implementation was sluggish in

India. On contrary other countries were quick enough to spread the concept of

green banking. Bangladesh, Brazil, China, Mexico and Turkey were some of the

countries where green banking stretched rapidly. Bangladesh Bank was the

world’s first central bank, which had proper knowledge on green banking. All

respected banks in Bangladesh made their own set of rules and regulations to

protect environment pollution and to lend money to those industries linked with

renewable resources. Customers were provided with online-banking facilities

covering money transfer and bills payment. Green banking in Bangladesh reduced

the use of paper and promoted eco-friendly practices like solar energy, etc.

Secondly, Brazil banks were among the earliest banks to sign up to the Equator

Principles. They used voluntary banking standards distribution of funds for

environment issues represent a social consideration into bank lending. Thirdly, in

China the central government had created a national policy framework

encouraging the adoption and expansion of green credit, a concept which

encourages Chinese banks to consider environmental aspects like pollution, heath,

safety of people into their lending practices.

Sohel Mehedi (2017)67 evaluated the middle level bankers’ perception

regarding green banking in Bangladesh. The study also accumulated the factors

which have influenced the adoption of green banking. The data have been

collected through semi-structured questionnaire from 30 customers of the six

scheduled commercial banks in Bangladesh. These banks are found as more

67
Sohel Mehedi (2017). “The Identification of Bankers’ Perception towards Indicators for the
Adoption of Green Banking in Bangladeshi Scheduled Commercial Banks”, Journal of Internet
Banking and Commerce, Vol. 22, No. 2, August, pp.1-18.
 67

customer oriented and initially focused green activities among the banks operated

in Bangladesh. With the passage of time to cater to the needs of customers, the

paperless transaction and solar energy is on the increase to a great extent and this

process supposed to get more momentum in the days ahead. In the case of factor

analysis, five components are the decisive influential indicators which carry 57.64

per cent persuasive power to the adoption of green banking in Bangladesh.

Anantha Shayana, Ashrith N Raj and Shivaprasad Rai (2017)68 made an

attempt to study the management of environmental risk and identify opportunities

for innovative environment friendly financial products; to identify the various

strategies for adopting green banking approach; to understand the concept of

green banking; to study the issues and challenges faced during the adoption of

green banking; and to understand the sustainable growth of green banking in

India. The paper is descriptive and analytical in nature. The present study is based

on necessary information collected from both primary and secondary sources. The

primary data were collected from 100 respondents with the help of questionnaire

in the coastal regions of Karnataka. Secondary sources like books, articles,

journals, newspaper, web browsing, etc. have been used. It was found that many

people are unaware of features, advantages and activity of green banking. People

are not effectively using computerized banking facilities. The study suggests that

banks should enhance security and create awareness among the people. Banks

should change their daily routine work through the paper less banking, online

banking, mobile banking, mass-transportation system, etc.

68
Anantha Shayana, Ashrith N Raj and Shivaprasad Rai, K (2017). “A Study on Problems and
Prospects of Green Banking with Reference to Coastal Regions, Karnataka, India”, International
Journal of Research in Finance and Marketing, Vol. 7, No.1, January, pp. 141-151.
 68

Shilpa Shetty and Gopika Unnikrishnan (2017)69 made an attempt to

study and compare the green banking practices of USA and India; and to offer

suggestions to improve green banking in India. The paper is a descriptive study

based on information collected from secondary sources like various banking,

financial and other institutions that practice green banking in USA and India. The

study reveals that RBI has given two dimensions to the concept of green banking

which has led to the diversion in understanding and execution of green banking

compared to U.S. The study concludes with the suggestions to further promote

green banking in India. The initiative of developing IREDA to a green bank

should be accelerated. In the long run, the CGC model of green banks followed in

the USA should be replicated in India where green banks along with public funds

should also accept corporate investments. Corporate investment in green bank

should be included in Section 135 of Companies Act of 2013 to a limited amount.

To further promote such investment, the company should also be entitled to

receive a nominal rate of return which shall be tax exempted.

Kumara (2017)70 made an attempt to understand the green banking

situation particularly Indian banking system; and to critically review the existing

literature on green banking in Indian context. In India, most of the studies have

focused on examining the environmental development, deforestation, climate

change and so on. To some extent analysis has been done pertaining to wildlife.

Nevertheless, literature on the green banking, ECS, net banking and cashless

69
Shilpa Shetty, H and Gopika Unnikrishnan (2017). “A Comparative Study of Green Banking
Practices in India and USA”, International Journal of Research in Finance and Marketing, Vol. 7,
No.1, January, pp. 10-19.
70
Kumara, B.M (2017). “Sustainable Growth of Green Banking in India: Issues and Challenges”,
Paripex- Indian Journal of Research, Vol.6, No.2, February, pp.244-245.
 69

transaction is scanty. Thus, the paper mainly based on literature review collected

from various books, journals, reports and so on. The paper stated that with

increasing concern about global warming and conserving environment, Indian

banks are becoming more responsive towards the green aspirations of their

customers. New initiatives like green products and new environment friendly

policies are being adopted. This endeavour will surely help them in creating long-

term value for their business.

Md. Abdul Razaque and Niranjan Nayak (2017)71 studied the various

green banking initiatives taken by different banks and how the initiatives are

contributing to their sustainability. The study is based on secondary data. Data

required for the study were obtained from various banks, information published on

the banks and RBI website, scholarly articles and so on. The sample consists of 6

major banks. Among the six banks, three are public sector banks and other three

are private sector banks. From the literature and secondary data analysis, it is

observed that both the public and private sectors banks are aggressively working

towards a paperless banking system. Banks like SBI, PNB and ICICI Bank have

started dedicated programs related to specific business section, to reduce their

carbon footprints. With regard to paperless banking activities like mobile banking

and electronic fund transfer, private sector banks have shown a lot of aggression

which is showcased by the higher rate of growth. But still, Indian banks have a

long way to go, before they can become completely green organization. One of

the important strategies which they need to follow is the adoption of LEED

71
Md. Abdul Razaque and Niranjan Nayak (2017). “Sustainable Development through Green
Banking: The Way Ahead for Banking Sector”, International Journal of Engineering and
Management Research, Vol.7, No.3, May-June, pp.76-81.
 70

certification for green building. Another measure the banks need to follow strictly

is the energy audit system. Banks should conduct regular energy audits of their

offices so that they can detect those processes which consume excess energy. This

way, banks can reduce their carbon footprints considerably. Banks should

implement strict environment systems, before financing any project. Some of the

systems are environment audit management, environmental impact assessment

and annual reporting system. They should provide incentives to green projects,

and make it tough for polluting projects, to be sanctioned. Green banking can be

used as an opportunity to reduce pollution and save the environment, which will

lead to sustainable growth.

Tran Thi Thanh Tu and Nguyen Thi Phuong Dung (2017)72 studied the

factors affecting green banking practices in Vietnam and the role of green banking

in sustainable development of the Vietnamese economy. A large scale survey was

conducted with 32 banks in Hanoi, Vietnam to obtain 329 questionnaires. By

using EFA analysis and the regression model, the study find that understanding

the definitions of green banking, the current activities of green banking, the

advantages in developing green banking, and the focused sectors have positive

relationships with the willingness of Vietnamese banks to adopt green banking

practices. The study suggests some solutions to not only enhance the

understanding of the importance of green banking in economic development but

also improve the willingness to follow green banking practices among Vietnam’s

72
Tran Thi Thanh Tu and Nguyen Thi Phuong Dung (2017). “Factors Affecting Green Banking
Practices: Exploratory Factor Analysis on Vietnamese Banks”, Journal of Economic Development,
Vol.24, No.2, pp. 4-30.
 71

banking institutions. It could be concluded that deployment of green banking is an

inevitable trend in the development strategy of Vietnam's commercial banks.

Nushrat Nahida Afroz (2017)73 evaluated the present condition of the bank

regarding the use of solar energy, green banking culture and ecological balancing

of different department; and to understand and analyze the social responsibility of

Islamic Bank Bangladesh Limited and also environmental contribution to the

economy; to show the green banking performance of Islamic Bank Bangladesh

Limited through its different initiatives. The primary data were collected through

face to face conversation with 4 officers, staff, and sharing practical knowledge

with officials. Secondary data were collected from annual reports of Islamic Bank

Bangladesh Limited, audit reports, website, research papers, newspaper, journal,

internet and various studies. This paper presented green banking initiatives of

Islamic Bank Bangladesh Limited by analyzing the social responsibility of Islamic

Bank Bangladesh Limited and environmental contribution to the economic

development in Bangladesh. The study suggests that government should take

necessary steps to enforce existing environmental regulations and formulate

appropriate rules to ensure ‘Pollute Pays Principle’ in the country. The central

bank of Bangladesh can play a proactive role in formulating a national level

‘Green Credit Policy’ and creating a sound incentive structure for performing

environmental risk practices by banks. A discount window may encourage banks

to undertake green financing. The study concluded that the success of the

73
Nushrat Nahida Afroz (2017). “Green Banking Initiatives of Islamic Bank Bangladesh Limited”,
Global Journal of Management and Business, Vol.17, No.1, pp.1-8.
 72

proposed framework would depend upon the proactive role of all stakeholders and

a sound incentive structure.

Guru Prasad Rao, et al. (2017)74 made an attempt to study the green

banking trends among the BRICS nations; and to understand the market

penetration of green banking users among the BRICS nations. The data were

collected from various journals, articles, books and similar publications.

Considerable information was also collected from websites and newsletters. The

study identified the various initiatives implemented by BRICS nations.

Technological development has been a major growth driver for the banking

industry among the BRICS nations. Though the growth rate has been slow, banks,

government and regulators are closely working towards improved penetration

among the respective countries. Though the growth rate is at a good level, more

focus should be on enhancing the security features of the technological product,

which is a key concern today from the user among the BRICS nations.

Renuka (2018)75 carried out a research to study the current environmental

issues with special reference to the benefits of using renewable sources of energy;

to study the adoption level of green banking practices with respect to renewable

resource energy by various institutions and individual household; and to create

awareness about green banking practices to the general people. The study is based

on secondary data which are collected from magazines, different journals and

74
Guru Prasad Rao, et al. (2017). “BRICS Banking: Review of Green Banking among the BRICS
Nations”, The Business and Management Review, Vol.9, No.1, July, pp.44-51.
75
Renuka, T (2018). “A Study on Green Banking Practices on Renewable Resource Energy”,
International Journal of Engineering Technology Science and Research, Vol.5, No.1, January,
pp.495-503.
 73

articles, and banks’ websites. The study states that green banking success would

be more if the governments start to revise their economic paradigms from being

'monetary economics' to 'ecological economics', and begin to transform their

accounting principles from purely being financial to operational energy. This

requires passionate involvement, dedication and commitment from all the

stakeholders like government, financial institutions, banks, regulators, corporates

and community at large. All over the world, banks are concerned about the overall

impact of depletion of environment. The study concluded that implementing

environmental standards for lending, this is really a proactive idea that would

enable eco-friendly business practices which would benefit the future generations.

A well-built banking industry is imperative in every country and can have

a noteworthy effect on environmental sustainability. Apart from the developed

countries, the developing countries like India are experiencing strong green

banking. There have been a number of studies pertaining to green banking

covering a range of research dimensions. In India, relatively less numbers of

studies were conducted on green banking and environmental sustainability.

Besides, the above studies have not covered the entire aspects of the green banking

taking into measures namely, awareness of the customers on green banking,

customers’ satisfaction towards green banking products, impact of green banking,

role of green banking in environmental sustainability and implementation barriers

of green banking all together. With this background, the present study is an attempt

to fill in the research gap in these areas. The study covers 6 commercial banks, with

a sample of 540 customers in Erode district.