For Daily Job Alert Join Our Whats App Channel
For Free Study Material Join Our Telegram Channel

Green Banking is a new phenomenon in the financial world. Banks as the financing agent of the economic and developmental activities have an important role in promoting overall sustainable development. Green banking is the term used by banks to make them much more responsible to the environment. The term green banking means developing inclusive banking strategies which will ensure sustainable economic development.

Green Banking entails banks to encourage environment friendly investments and give lending priority to those industries which have already turned green or are trying to go green and, thereby, help to restore the natural environment. Green banking means combining operational improvements, technology and changing client habits in banking business. It means promoting environmental- friendly practices. This comes in many forms such as

using online banking instead of branch banking; paying bills online instead of mailing them; opening up CDs and money market accounts at online banks, instead of large multi-branch banks; or finding the local

bank in the area that is taking the biggest steps to support local green initiatives. Foreign banks are practicing green banking on a much serious note. The Indian banks are still taking baby steps into this form of banking. Still, many of them are keen to actively pursue this strategy.

Green Banking is like a normal bank, which considers all the social and environmental factors; it is also called as an ethical bank. Ethical banks have started with the aim of protecting the environment. These banks are like a normal bank which aims to protect the environment and it is controlled by same authorities as what a traditional bank do. There are many differences compared with normal banking, Green Banks give more weight to environmental factors, their aim is to provide good environmental and social business practice, they check all the factors before lending a loan, whether the project is environmental friendly and has any implications in the future, you will awarded a loan only when you follow all the environmental safety standards.

Defining green banking is relatively easy. Green Banking means promoting environmental friendly practices and reducing your carbon footprint from your banking activities. This comes in many forms

1)Using online banking instead of branch banking.

2)Paying bills online instead of mailing them.

3)Opening up accounts at online banks, instead of large multi-branch banks

4)Finding the local bank in your area that is taking the biggest steps to support local green initiatives.

Characteristics& features of Green Banking

Depending on the state, a green bank may conform to a variety of forms, utilize many different public funds, and create a diverse array of financial products. Banks may utilize financial tools such as long-term and low interest rate loans, revolving loan funds, insurance products and low-cost public investments or it may design new financial products. Ultimately, all green banks will exhibit several common characteristics:

  • Stimulate demand by covering 100% of the upfront costs with a mixture of public and private financing.
  • Leverage public funds by attracting much greater private investment for clean energy and markets.
  • Recycle public capital so as to expand green investment and leave taxpayers unharmed.
  • Scale-up clean energy solutions as fast as possible, maximizing clean electricity and efficiency gains.


Please enter your comment!
Please enter your name here