Dhaka, Bangladesh (BBN)- The central bank has identified six major challenges for the commercial banks, including awareness of the top management, in implementing green banking.
Coordination among the public and private commercial banks and effective capacity building are also two major areas of concern identified by the Bangladesh Bank (BB) in its report on green banking published on Tuesday last.
The three other challenges are: Immediate concentration on sectoral lending policies and procedures, the need for applying a quantitative approach for a more justified rating, and the relocation of different categories of mills and factories such as garment factories, textile mills and tanneries to proper locations.
Green banking means eco-friendly or environment-friendly banking that can stop environmental degradation to make this planet more habitable. 
The BB report said awareness of the top management is “necessary and important” for implementing green banking across the country.
To face the challenges, Khandker Morshed Millat, BB deputy general manager (DGM) and head of its green banking cell, said, the authorities “need to apply green banking and use the Environmental Risk Management (ERM) guidelines in an efficient manner and also develop a culture within their organizations based on environmental governance.”
They also need to replicate the best global and local practices, he added.
Out of the 47 commercial banks in the country, 41 formulated policies on green banking while six are yet to go for such a policy. 
The six are Rupali Bank, National Bank, BRAC Bank, Habib Bank, Citibank NA and Bank Alfalah, according to the BB officials.
The BB DGM also said the authorities need to share knowledge and technical know-how with peer groups, apply a quantitative approach towards the environmental risk rating and develop a database for technical assistance and issues in a bid to implement green banking. 
“Green banking is not limited only to in-house green activities, but extends to facilitating green financing,” a BB official said.
“Green financing under green banking activities can make a great contribution to the transition to resource-efficient and low carbon industries, i.e. green industry and green economy in general,” he added.
The central bank, meanwhile, warned managing directors (MD) of the six commercial banks against being fined, if they fail to frame a green banking policy by December 31 next.
 
BBN/SSR/AD-08Oct12-10:20 am (BST)