GREEN BANKING PRACTICES AND ITS IMPLICATION ON FINANCIAL PERFORMANCE OF THE COMMERCIAL BANKS IN BANGLADESH

Green banking means incorporation of environmental issues in all sorts of banking activities ranging from communication to clients, marketing, service delivery, in house operations to selection of projects to finance. The central bank of Bangladesh insists all commercial banks to implement green banking policy guidelines and make green investments. This study examines the implementation status of the green banking policy guideline and the impact of green banking practices on the financial performance (ROA, ROE, ROI) of the commercial banks in Bangladesh. By analyzing 3 years’ (2016-2018) annual reports of the commercial banks listed in Dhaka Stock Exchange the study found that over 90% of the banks have implemented majority (above 60%) of the green banking policy guidelines provided by the central bank. However, the practices of certain policies such as periodic reporting of green banking practices with standard format and external verification (policy 3.2), client education program (policy 2.5) and creation of climate risk fund (policy 1.9) are not at satisfactory level. Less than 70% of the banks have adopted these policies. Results of correlation and regression analysis indicate that green banking practices positively influence financial performance