Green Banking

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Abstract

In response to increasing awareness over climate change, environmental degradation, urgent

measures for sustainable development have been addressed by some of the stake holders all over

the world. It has become every firms' sole responsibility to practice green marketing for the

welfare of consumers and society. One of the most important sector is banking system which

holds a unique position in an economy that can affect production, business and other economic

activities through their procedure for financing activities which would in turn contribute to

protect environment or climate from pollution. Moreover, efficiency in energy use, water

consumption and waste reduction may significantly contribute for operating cost of many of the

large banks of the country.

Projects or Businesses those include waste prevention and resource efficiency systems in a wide

range of sectors including community, commercial and business organizations - such as

shopping centers, regional airports, hospitals, construction, farms, a university, public

organizations, and educational organizations are receiving enhanced attention these days.

Green finance as a part of Green Banking makes great contribution to the transition to resource-

efficient and low carbon industries i.e. green industry and green economy in general. Green

banking is a component of the global initiative by a group of stakeholders to save the

climate/environment. Green banks or environmentally responsible banks do not only improve

their own standards but also affect socially responsible behavior of other businesses.

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The growing financial sector especially banks in Bangladesh can play key role as one of the

important stake-holders of the economy enforcing the businessmen/industrialists of the country

to design their strategy/action plan keeping in mind the vital environmental issues.

Green banking is the operation of the banking activities giving especial attention upon the social,

ecological and environmental factors aiming at the conservation of nature and natural resources.

Banks can be green through bringing changes in six main spheres of banking activities. Those

are Change in Investment Management, Change in Deposit Management, Change in House

Keeping, Change in the Process of Recruitment and Development of Human Capital, Corporate

Social Responsibility (CSR), and Making Consciousness Among Clients and General Mass.

Such an initiation can ensure a safe residence for upcoming generation.

In our country, Bangladesh Bank has already issued circulars regarding this. Banks have already

been asked to make their own green banking policy. Now we only need raising voice, keeping

hand over hands, thinking in positive way and working in collective manner to make this a true.

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 1. Introduction

Green Marketing

Green marketing refers to the process of producing and selling (package) products and also

services based on their environmental benefits. In current scenario more companies are starting

to follow the green marketing, at the same time urban consumers are more aware of the green

marketing but rural consumers not more aware of the green marketing.

In a world all the countries are taking necessary steps to reduce the plastics and implement the

Environmentally Friendly products way of Green Marketing and save the earth. These kinds of

products are not affecting the environment and also re-compose the wastage to re-usable. So this

could save the earth from the wastage and also save the peoples Health.

According to the American Marketing Association, Green marketing as efforts by business

or organizations to produce, promote, package, and reclaim products in a manner that is

sensitive or responsive to ecological concerns.

Green marketing refers to " Integrating business practices and products that are friendly to the

environment while also meeting the needs of the consumers" as stated by Pearson education.

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Green marketing is important because it looks at how marketing activities utilize earth's limited

resources, while satisfying consumers wants, both of individuals and industry, as well as

achieving the selling organization's objectives.

In a world all the countries are taking necessary steps to reduce the plastics and implement the

environmentally friendly products way of Green Marketing and save the earth. These kinds of

products are not affecting the environment and also re-compose the wastage to re-usable. So this

could save the earth from the wastage and also save the peoples Health.

CHARACTERISTICS OF GREEN Marketing

In current scenario people are using more products were compared to olden days. Products those

are produced in a safe way of environment and the products which are re-compostable called as

green products. The characteristics of green products are:-

Products those are with natural ingredients and originally grown

Products those are recyclable, reusable and biodegradable,

Products should be ozone safest,

Products should be organic,

Products containing recycled content, non-toxic chemical,

Products contents under approved chemical,

Products should be printed in carbon footprint, carbon neutral etc.

The Four "P's" of Green Marketing

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 Product: A producer should offer ecological products which not only must not

contaminate the environment but should protect it and even liquidate existing

environmental damages.

Price: Prices for such products may be a little higher than conventional alternatives. But

target groups are willing to pay extra for green products.

Place: A distribution logistics is the most important aspect but main focus is on

ecological packaging. Marketing local and seasonal products e.g. vegetables from

regional farms is more easy to be marketed green than products imported.

Promotion: A communication with the market should put stress on environmental

aspects and may be publicized to improve a firms image. Furthermore, the fact that a

company spends expenditures on environmental protection should be advertised. Third,

sponsoring the natural environment is also very important. And last but not least,

ecological products will probably require special sales promotions.

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Five Possible reasons for Global Firms for using Green Marketing.

Opportunities: According to researches, it appears that all types of consumers, both

individual and industrial are becoming more concerned and aware about the natural

environment and thats why organizations perceive environmental marketing to be an

opportunity that can be used to achieve its objectives . Therefore it can be assumed that

firms marketing goods with environmental characteristics will have a competitive

advantage over firms marketing non-environmentally responsible alternatives.

Social Responsibility : The global organizations nowadays believe they have a moral

obligation to be more socially responsible.Many firms are beginning to realize that they

are members of the wider community and therefore must behave in an environmentally

responsible fashion. This translates into firms that believe they must achieve

environmental objectives as well as profit related objectives. This results in

environmental issues being integrated into the firm's corporate culture.

Governmental Pressure :As with all marketing related activities, governments want to

"protect" consumers and society; this protection has significant green marketing

implications. Governmental regulations relating to environmental marketing are designed

to protect consumers in several ways, reduce production of harmful goods or by-

products; modify consumer and industry's use and/or consumption of harmful goods; or

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 ensure that all types of consumers have the ability to evaluate the environmental

composition of goods. These ways governmental bodies are forcing firms to become

more responsible. In many countries, governments establish regulations designed to

control the amount of hazardous wastes produced by firms. Many by-products of

production are controlled through the issuing of various environmental licenses, thus

modifying organizational behavior.

Competitive Pressure: Another major force in the environmental marketing area has

been firms' desire to maintain their competitive position. So Competitors environmental

activities pressure firms to change their environmental marketing activities many cases

firms observe competitors promoting their environmental behaviors and attempt to

emulate this behavior. In some instances this competitive pressure has caused an entire

industry to modify and thus reduce its detrimental environmental behavior.

Cost or Profit Issues : Cost factors associated with waste disposal, or reductions in

material usage forces firms to modify their behavior. Firms that can reduce harmful

wastes may incur substantial cost savings. When attempting to minimize waste, firms are

often forced to re-examine their production processes. In these cases they often develop

more effective production processes that not only reduce waste, but reduce the need for

some raw materials. This serves as a double cost savings, since both waste and raw

material are reduced. Another way in which cost or profit issues may affect firms'

environmental marketing activities is that new industries may be developed. This can

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 occur in two ways: a firm develops a technology for reducing waste and sells it to other

firms; or a waste recycling or removal industry develops .

CHALLENGES OF GREEN MARKETING

New Concept

New concepts are not easy to reach very quickly to the consumers. They need to take more time

to reach the consumers.

The company and government need to take steps that are creates more awareness and explain

about the new concept, and then only the consumer can understand and try to follow the new

concept. When consumers understand the new concept, then only they are going to accept the

new concept. Otherwise the new concept will facing many problem.

Need for Standardization

There is no standardization to authenticate these claims. There is no standardization currently in

place to certify a product as natural. Unless some regulatory bodies are involved in providing the

certifications there will not be any verifiable means. A standard quality control board needs to be

in place for such labeling and licensing.

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 Patience and Perseverance

The investors and corporate need view the environment as a major long-term investment

opportunity, the marketers need to look at the long-term benefits of this new green practices. It

will require a lot of patience and no immediate results. Since it is a new concept and idea, it will

have its own acceptance period. After the acceptance period automatically the concept reaches to

the consumers. So up to that period the investors need to wait.

Unwilling to pay premium

If green products are produced more, then the cost of production also raises when compared with

ordinary product. Raw material cost going high and production cost and also low sales, those

factors are going to raise the price of the green product. So consumers are not ready to pay a

premium amount for greener products.

7 STEPS TO IMPLEMENT GREEN MARKETING

In generally the implemented green marketing in business is more way seven though there are 7

steps to implement green market. These are the 7 steps to implement green marketing for their

business:

1. Reduce your printing habits

2. Print on both sides of the paper

3. Use recycled, post-consumer paper

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4. Go digital when possible,

5. Shy away from ineffective marketing programs.

6. Reduce unnecessary product packaging.

7. Use alternative sources of energy.

HOW TO IMPLEMENT GREEN MARKETING

Implementation of practices of green of marketing not only by firms and also individuals can

follow. These are the some of the ways to follow green marketing practices are:

Through website for advertisements,

Use green printing for product manuals,

Choose 100% recycled printer paper,

Go with green clothing,

Rethink your package and recyclable package paper,

Green delivery and better use cycle for courier in near area,

Send electronics proof,

Eco business card (Visiting card)

In above we saw all over about the green marketing characteristics, benefits, challenges, how to

implement green marketing, 7 steps to implement green marketing, present trends and future of

green marketing. Consumers are most aware all about green marketing and try to necessary steps

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to follow green marketing. Industries are needed to give more and clear state about green

marketing and advantages and benefits to the consumers then only them aware and try to follow.

Finally the important one is government; government is playing a vital role to create new rules

and regulations for implementing green marketing. Also government gives loans and subsidies

for innovative, environmentally friendly products producing companies.

1.1.About green Banking;-

Green in some studies, the term green refer to define a broad range of social, ethical and

environmental dimensions. However, for the purpose of the study that tends to look into

environmental aspect, green in the discussion is primarily to describe banks impacts on the

environment, environmental responsibility as well as environmental performances in their

activities.

Green Banking defined as promoting environmental-friendly practices and reducing your carbon

footprint from your banking activities. Green banking thus involves a two pronged approach.

Firstly, green banking focuses on the green transformation of internal operations of all banks. It

means all the banks should adopt appropriate ways of utilizing renewable energy, automation

and other measures to minimize carbon footprint from banking activities.

Secondly, all banks should adopt environmentally responsible financing; weighting up

environmental risks of project, before making financing decisions; and in particular supporting

and fostering growth of upcoming green initiatives and projects.

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On the other side Green Banking is like a normal bank, which considers all the social and

environmental/ecological factors with an aim to protect the environment and conserve natural

resources. It is also called as an ethical bank or a sustainable bank.

1.2 Green Banking Stakeholders;-

Customer
Government

Rating
agencies

Environmental
Authority
Capital
Market
Bank
National
council
Bank

Bank NGOs
association
Int. financial
institution

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1.3 Purpose;-

The purpose of Green Banking Policy will be to ensure necessary measures to protect

environmental pollution while providing service or financing customers as well as to improve in-

house environment management through efficient use of various resources at Head Office,

Branches and other link offices.

1.4.Importance of Green Banking

Green banking is very important in mitigating the following risk involving the banking

sector:

a) Credit Risk:

Due to climate change and global warming, there have been direct as well as indirect costs to

banks. It has been observed that due to global warming, there have been extreme weather

conditions which affect the economic assets financed by the banks, thus leading to high

incidence of credit default. Credit risk can also arise indirectly when banks lead to companies

whose business is adversely affected due to changes in environmental regulation.

b) Legal Risk:

Banks, like other business entities, face legal risk if they do not comply with relevant

environmental regulation. They may also face risk of direct lender liability for cleanup costs or

claims for damages in case they actually take possession of polluted causing assets.

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 c) Reputation Risk:

Reputation and image are very important for the bank. It is important to demonstrate that the

bank acts responsibly at all the times and this is particularly important when providing finance

for major business activities. Not considering environmental impacts arising from a borrowers

operations can result in negative publicity for both the borrower and the Bank. Reputation risk is

present in financing transactions particularly where the bank considering a large exposure. The

banks reputation can be damaged if there is a failure of the business due to environmental

reasons.

d) Security Risk:

Bank might be exposed due to poor quality of the security / collateral e.g. contaminated land or

disposal of hazardous chemicals, in case of default. This is a direct risk.

2. Green Banking Process, Products and Services, Strategies

A bank is a financial institution and a financial intermediary that accepts deposits and channels

those deposits into lending activities, either directly or through capital markets. Banks offer

different channels to access their different banking products and services through ATM, Branch,

Mobile banking, Internet banking, etc. There are four major avenues for greening banks

processes, products and services, strategies and other activities which are briefly outlined here.

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2.1 Green Banking Process

A Green Bank requires each of its functional units and activities to be green environmentally

friendly and help to improve environmental sustainability. Several opportunities are available for

banks to green their functional units and activities. Key among them are :-

a) Supply Chain Management

Adopt techniques and plans to minimize inventory and wasted freight

Adopt networked design using a carbon footprint.

b) Enterprise Resource Management

Facilitate paperless transactions

Adopt techniques for workforce and parts optimization as well as intelligent device

management.

c) Customer Relationship Management

Use electronic means, wherever possible, to maintain contact with and correspond with

customers and potential customers, and minimize paper-based correspondences.

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 d) Product Life-Cycle Management

Design and offer banking products and services in such a way that consume less

resources and energy and thereby reduce carbon footprint

Implement effective systems for product end-oflife management that have minimal

impact on the environment.

2.2 Green Products and Services

Banks are developing new products and services that respond to consumer demand for

sustainable choices. Following are some of the options that banks should offer to their customers,

if they are not offering already:

Electronic and telephone banking, facilitating customers to perform most of their banking

needs anytime, anywhere

Automatic payments reduce the need to write and send cheques by mail

Electronic (paperless) statements, product information, guides and annual reports to

customers and stakeholders

Offering and promoting mutual funds that focus investment in 'green' companies

Offering a special line of credit to help homeowners invest in energy-efficiency upgrades

for their home

Offering credit cards co-branded with environmental charities.

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2.3 Green Banking Strategies

In Bangladesh many banks adopts the green banking business model for sustainable banking by

launching the following strategies:

a) Carbon Credit Business

Clean Development Mechanism (CDM) provides for co- operation between developed and

developing countries. The operational mechanism of CDMs involves an investment by a legal

entity from a developed country to developing country, which results in emission reduction.

These emission reductions have to be certified by an appropriate authority and these Certified

Emission Reductions (CERs) are commonly known as Carbon Credits. The banks can involve

themselves in carbon credit business, wherein banks can provide all the services in the area of

CDMs and carbon credits and the services of identification and funding of CDMs projects,

advisory services for registration of CDM projects and commercialization of CERs under

different structures to meet the requirements of its customers.

b) Green Mortgages:

Dhaka Bank Ltd. will offer special discount to the borrower who will provide mortgage of land

and buildings which are greener. This initiative will induce use of more energy-efficient

materials and building plans.

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Dhaka Bank will not allow the land as mortgage that is prone to environmental impacts by virtue

of its geographical location and polluted by the operation business activities. As a mortgage

preference will be given to the buildings those are designed and constructed with energy efficient

items such as solar panels and improved insulation.

c) Carbon Footprint Reduction:

Carbon foot-print is a measure of the impact of our activities on the environment. It relates to

the amount of GHG we are producing in day-to-day business while burning fossil fuels for

electricity, heating, transportation etc. Dhaka bank will take the following measures to reduce the

carbon footprint:-

i. Paperless Banking: As the bank is computerized with all branches, there is ample scope

for doing paperless or less-paper banking. Normally banks use huge quantity of papers

for office correspondence, recording public transactions and reporting, etc. Dhaka bank

will switch over to electronic correspondence and reporting more effectively and the

customer would be encouraged and popularize e-statements.

ii. Energy Consciousness: Developing energy consciousness, adopting effective office

time management and automated solutions and using compact fluorescent lighting (CFL)

can help banks save energy consumption considerably. Dhaka bank has also adopted the

policy to use energy savings lights, to use gradually renewable energy such as solar

panels in all their branches.

iii. Using Mass Transportation System: Bank will take the policy for mass transportation

for staffs working in one place.

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 iv. Green Building: Dhaka Bank gradually will build their office building as per the code of

green building to reduce their carbon footprint as well as to save the cost.

3. Green Banking Policy

The Green Banking Policy promoted by Bangladesh Bank has been phased out to internalize

learning by doing principle:

3.1 Phase I

Activities under Phase I are to be completed by December 31, 2011 or within extended time

allowed by Bangladesh Bank. This phase includes developing Green Banking policies and shows

general commitments on environment through in-house performance.

a. Policy formulation and governance

b. Incorporation of environmental risk in core risk management (CRM)

c. Initiating in house environment management

d. Introducing green finance

e. Creation of climate risk fund

f. Introducing green marketing

g. Online banking

h. Supporting employee training, consumer awareness and green event

i. Disclosure and reporting of green banking activities

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3.2 Phase II

Activities under Phase II are to be completed by December 31, 2012

a. Sector specific environmental policies

b. Green strategic planning

c. Setting up green branches

d. Improved in house environment management

e. Formulation of bank specific environmental risk management plan and

f. guidelines

g. Rigorous programs to educate clients

h. Disclosure and reporting of green banking activities

3.3 Phase III

Activities under Phase III have to be completed by December 31, 2013. At this phase, the Bank

will introduce Green Products and submit report based on international standard.

a. Designing and introducing innovative products

b. Reporting in standard format with external verification

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In order to incentivize the participating banks to engage more proactively in green banking

activities, the central bank has decided to provide following preferential treatments:

Awarding credit points for green banking initiatives in the assessment of management

component of CAMELS rating for a bank.

Publicizing names of top ten performers in green banking at Bangladesh Bank website.

Taking into account green banking performance while considering requests for new bank

branch licenses.

4. Industry Analysis

4.1 Allocation for Green Banking

Banks are required to allocate a considerable amount for green banking in their annual budgets,

which will include

I. Budget for green finance

II. Budget for Climate Risk Fund and

III. Budget for marketing & capacity building for green banking.

35 Banks have allocated Taka 23,018.36 million in their annual budget for 2012. On average, a

bank allocated Taka 657.67 million for green banking in 2012

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Area Amount (in million taka)

Green Financing 20,034.59

Climate Risk Fund 2,141.74

Marketing and Capacity Building for Green 852.73

Banking

Amount (in million taka)

25,000.00
20,000.00
15,000.00
Amount (in
10,000.00 million taka)
5,000.00
0.00
Green
Marketing
Climate
Finanace
risk
andchange
Capacity Building

4.2 Green Finance:

For 2012 banks have allocated Taka 20,034.59 million for green finance of which Taka 3,273.69

million has been utilized during January to September 2012.

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Bank Category Allocation for year 2012 Utilization

(January-September 2012

SCBs 6,160.00 25.53

PCBs 11,506.79 2,828.73

FCBs 1,017.80 76.80

SDBs 1,350.00 342.63

Total 20,034.59 3,274.69

30,000.00
Allocation for
20,000.00 year 2012
10,000.00
0.00 Utilization
(January-
September 2012

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4.3 Online Banking

Access to online banking services for the customers is expanding rapidly along with increase in

the number of branches with online coverage and accounts facilitated with internet banking.

The online banking scenario looks promising, wherein 3,226 out of 8,199 branches (39.35%) are

equipped with online banking services. 90.73%of the total branches of PCBs have been brought

under online banking coverage. 4.84% of the total branches of SCBs have been brought under

online banking coverage. The SCBs need to go a long way in the arena of green banking.

4.4 Mobile Banking:

With fast expanding mobile telephony and great enthusiasm of the banks in offering financial

services through mobile phones, Bangladesh Bank issued guidelines on mobile financial services

in 2011. 23 banks have been given license thus for to provide mobile financial services (MFS) of

which 14 banks have already started their operations. These banks are presently providing MFS

to around 1.5 million customers; average transaction volume is around Taka 330 million per day.

The average rate of growth of customer base in mobile banking is currently 15% per month.

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4.5 ATM Services of Banks

Most of the banks have been offering 24 hour banking services through their countrywide ATM

booths. Now 4,332 ATM booths are operating in Bangladesh. Dutch Bangladesh Bank is taking

the lead position with installation of 2,170 ATMs.

Bank Types Branches powered by SME/ATM units powered by

Solar energy solar energy
SCBs 15 8
PCBs 170 139
SDBs 24 0
FCBs 3 3
Total 212 150

250

200
Branches
150 powered by solae
energy
100 SME/ATM units
powered by solar
50
energy
0
SCBs PCBs SDBs FCBs Total
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 5. Green Banking Prospects

5.1 Change in Investment Management

Finance in Environment Friendly Projects:

Banks should ensure finance in projects those are environment friendly or ethical in nature. It is

necessary to give especial concentration upon their financing so that the project or any of its

parts they have taken or are going to take in hand will not be threat for the environment.

Investment should be increased for projects installing solar energy plant, bio-gas, and/or other

renewable energy plants, bio-fertilizer plants, Effluent Treatment Plant (ETP), Hybrid Hoffman

Kiln projects for the production of brick etc. At lower interest and utmost care they should take

proper steps in shielding the production of hazardous Carbon from their projects. Encouraging

farmers to grow salinity or flood tolerable species while providing them agro-investment and

providing this at lump-sum interest is also the part of Green Investment.

Investment in Waste Management Projects:

Banks should invest in projects to manage waste materials harmful for environment especially

produced by those mills and factories draining such components to rivers, rivulets, canals or

other water bodies and continuously doing harm to the environment. They should ensure proper

management of wastes bringing necessary chemical changes in components to make it

environment friendly through their projects.

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 Environmental Risk Rating before Investment:

Banks should invest in a project after assessing its environmental or climatic risk. They should

rate the presence of factors harmful for environment and its degree. Investment should only be

given after being insured about the proper management of those harmful components. Banks can

bring Green Home Loan, Green Car Loan and other newer products in this regard.

5.2 Change in Deposit Management

Implementation of Alternative Delivery Channel and On-line Banking:

Now days alternative delivery channels are ensuring modern banking facilities. Most common

alternative delivery channels are ATM card, credit card, debit card, mobile banking, on-line

banking, internet banking etc. BACPS (Bangladesh Automated Cheque Processing System) and

BEFTN (Bangladesh Electronic Fund Transfer Network) etc. implemented by Bangladesh Bank

has enhanced the services provided through alternative delivery channel. Such products in one

hand have sped up the services taken by the clients and in other hand have lessened the use of

paper materials ensuring the freshness of nature.

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 Making every Deposit Products Environment Friendly:

Deposits of clients are the main sources of money for every bank. So, banks provide different

deposit services to their clients. All of such deposit products should be made environment

friendly and should be brought under on-line management.

5.3 Change in House Keeping

Uses of papers encourage flattening of plants and lead the environment to destruction.

Considering this, banks should lessen the use of papers otherwise introduce the use of recyclable

papers. They should stop unnecessary printing and in need print on both sides of a paper and use

eco-fonts while printing. Storage of all necessary in- formation should be ensured through

establishing electric data bank like EDW (Enterprise Data Warehouse). E- tendering system

should be introduced in purchasing necessary stationeries and other items for the institution.

Office order, notice, account statement, invitation letter, thanking letter should be taken under

electronic system like E-mail and mobile SMS etc.

Meeting should be carried on through Video/Audio Conferencing rather than physical visit.

Necessary steps should be taken while making the office electricity sustainable. Ensuring the use

of day light instead of the use of electric bulb and ensuring proper ventilation instead the use of

AC may save energy. Energy saving bulbs can be used in need. Unnecessary use of light, fan,

AC and computer etc. should be stopped. Electricity supply to the office premises should be

ensured through utilization of solar energy and/or other renewable energies. Water and gas

should be used sustainably. Overall environment should be kept neat and clean and free from any

form of pollutants. All the staff members should be made conscious in this regard.
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5.4 Change in the Process of Recruitment and Development of Human Capital

Banks should start E-recruitment system while recruiting human capital. They can provide salary

and bonus etc. through on-line system and can grow their human capitals as environment

specialists and welfare worker along with making them skilled bankers. Skills and consciousness

can also be developed through arranging seminars and symposiums time to time. Dividing the

whole human capital of the institution into several clusters or groups and involving them in

different environment friendly activities may help the proper implementation of Green Banking.

5.5 Corporate Social Responsibility (CSR)

Now days every bank is playing vital roles in CSR concern. This is the responsibility of an

institution upon society where it is established. CSR can act in the following way in establishing

Green Banking -

Funding to combat against climatic change:

Banks can make especial funds to combat against climatic change and ensure its proper

utilization. They can help environmentalist NGOs or other such organizations through this fund.

Internal human resources of the bank can also play roles in this regard.

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 Combat against Natural Disasters and assisting :

Banks can play direct or indirect roles in combating natural disasters. Providing monetary sup-

ports, relief goods and interest free loans etc. after such diverse situation will assist the victims to

survive in the newer environment.

Policy Formulation and Report Making:

Banks should formulate policies and make reports on Green Banking and analyze those reports

to take necessary steps to ensure green environment through CSR.

IMPLEMENTATION OF GREEN MARKETING:

The Concept of i-Cheque :

i-Cheque is a form of cheque made via the internet, which is designed to perform the same

function as a conventional paper cheque. Because the cheque is in an electronic format, it can be

processed in fewer steps and comply with more security features than a standard paper check.

Security features provided by the proposed i-Cheque includes authorized signatures,

encryption, and authentication, among others.

Because of the many benefits and increased security methods that i-Cheque offer, this method

of payment shall have quickly grown the popularity.

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The E2E Processing system of i-Cheque :

Most of the customers of thr banking sector of BANGLADESH are already enjoying the i-

Banking service. During subscription in the i-Banking system customers are entitling an ID

along with password. With the same ID & password, he/she can use the i-Cheque as well.

There will be a model cheque in the web site of the bank, which is similar to the paper cheque.

While the customer will click in the i-cheque option in i-Banking, there will be same options

displayed as like as a paper cheque. (Please refer to Appendix-I for a model i-cheque)

Customer needs to just write the things what are required i.e., the name of beneficiary & amount

of payment (in number), and select the mode of payment (cash/account). Rest of the information

like, date, amount written in words, and encrypted Cheque number will be self generated by the

system. After this, when customer will click the OK command, a report (containing all the

aforesaid information) will go to the banks server, and queued against his/her account

(regular/credit cards). Now the customer has to print out that page from the net. Of course, there

will be a printing option available, till the cheque has been processed by the bank. Finally

customer/beneficiary has to submit the printed copy to the nearest branch with the authorized

signature in the designated fields of the printed cheque. (Please refer Appendix-II for the

processing flowchart of i-Cheque)

In case, the customer, who does not have any printing facility, shall keep the bunch of photocopy

of a reference letter (should be available in the website to download). She/he only needs to write

the beneficiary name along with the A/C# (exactly written in the i-Cheque system) & the

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encrypted cheque number generated by the system, and to put the authorized signature. (Please

refer to Appendix-III for model of i-Cheque reference letter)

Reaping the benefits of i-Cheque :

Using i-Cheque conversion to process customers' payments holds many benefits over

conventional paper cheques:

Reduced processing costs: In general, the cost to process an i-Cheque will be

substantially less than that of paper check processing; i-Cheques require less manpower

to process and eliminate incidental costs such as printing cheque books, delivering the

cheque books to customer, and maintaining relationship with courier agency (all are

variable cost). With contrast, to migrate in the i-Cheque system will require the system

development cost at once (i.e., fixed cost only), instead of all the aforesaid variable cost.

Upon discussing with a Software consultant found that, it may require BDT. 150K-200K

to develop the system of i-Cheque (Exact quantitative/cost-benefit analysis is not

possible due to lack of information)

Reduced risk of errors & fraud: i-Cheques will be processed using an automated system,

which cuts down the number of people who must handle the cheque, reducing the

potential for error and fraud by the use of real time risk management tool. The threat of

being defrauded for i-Cheque prevail for the following events,

o If a fraudster can hack the website/system/customers account of the Bank

Probability is very low.

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 o While the customer compromise his i-Banking ID & password, and fraudster

become successful to generate a cheque number & print the i-ChequeCustomer

shall be solely responsible for such incident.

o Fraudulently printed i-Cheque (in the 2nd event) submitted to Bank with fishy

signature of the customerStaff who will be involved in processing such i-

Cheque without verifying the customers signature with SigCap (e-

CSVS)/Photo+32, shall be responsible from the Banks side.

Improved TAT: Customer, who will use i-Cheque, will have funds deposited/paid almost

twice as fast as those using the traditional Cheque processing method.

Managing Brand Value: SCB will be a pioneer by taking such initiative in the Banking

industry. Providing the service with different channel (as fast as secured), encouraging

paperless system, and obtaining the patents for i-Cheque will remarkably create image

of SCB in the Banking service sector.

A Green Initiative: i-Cheque

is a smart choice for the environment, helping to reduce

more uses of gasoline (i.e., delivering cheque books through vehicles). Reduction in the

use of carbon & paper (for printing paper cheques) is really an exceptional instigation to

save the environment of Earth. In a study by an environmental research team, it was

found that, worldwide 3.6 million tons of greenhouse gas emissions created by

transporting paper cheques.

Promoting i-Cheque :

After launching of the i-Cheque system, customers will be gradually migrated to the system. This

can be done by informing customers through sending message/e-mail. The promotional strategy
34

for i-Cheque could be as same taken for promoting electronic billing system/sending Bank

Statement electronically i.e., enrollment for e-statement.

Other Possible Implementations Of Green Marketing Initiatives that can be taken by

Bangladeshi Banks

GreenSense Scheme GreenSense may pay Bank customers some discount every time there is

a paperless transaction up to some specific period. This way the bank saves money by not

mailing statements and dealing with paper bills, and it passes some of its savings on to the

consumer. In addition to saving money, this also saves paper, gasoline, and many other natural

resources.

Green Mortgages lowers mortgage rates one percent on a five-year fixed rate mortgage can

be for those who participate in the green mortgage. Customers can also receive up to 1% of their

mortgage value for buying energy efficient certified appliances. As an additional bonus, Banks

may donates money to the Friends of the Environment Foundations for each green mortgage

signed.

Save and Donate With the Save and Donate scheme , consumers can pick a charity to receive

an estimate percentage of the average annual account balance. The bank may also offer Ethical

Savings bonds, which offer 2-, 3-, and 5-year bonds with specific range the money in these

accounts is loaned to businesses like organic farms, microfinance organizations, and renewable

35
energy. This bank will not only be dedicated solely to benefitting green organizations, but it may

include many eco-friendly businesses.

Ethical Banking Bank may offer ethical banking, ensuring that it only banks with

organizations its customers decide are ethical. The bank may offer a credit card that gives

shoppers 0% interest for three months on its green think partners. The bank may also offer

green mortgages and a wide variety of other green products.

Green Banking Charity When a consumer opens an account at a bank, a certain sum of

money is donated to a local environmental charity. These products allow customers to donate to

local charities

36
37
Flowchart of processing i-Cheque :

Customer generated an i-Cheque in the system

Printing the i-Cheque/fill up the i-cheque reference
Step 1: Infront of letter, and put signature duly.
customer's
PC/tablet

Submitting the printed i-Cheque/reference letter to

the teller
Teller ask the security question to the bearer/call
back to customer, match the signature with the
Step 2: At the system SigCap or, Photo+32, and match the
Branch encrypted cheque number.

Approve the queued cheque (against customer's

account) in the system, and execute the transaction.
Step 3: Operational Archiving the i-Cheque/print the i-Cheque & attach
Activities of the with the reference letter.
Bank

38
Appendix-II

i-Cheque Reference Letter

The Manager

___________ Branch

BANK NAME

Subject: Transaction against my i-Cheque#______________________________

Dear Sir,

I Mr. /Ms. _____________________________ informing you that, an i-Cheque bearing the number
mentioned in subject, has been generated by me dated on ___/___/____. Requesting you to make the
payment of amount mentioned in my i-Cheque to Mr. /Ms. _______________________________ or,
bearer from my A/C# or, CC#_____________________________.

I do hereby declare that, I am giving this payment instruction with my proper acknowledgement.

Sincerely yours,

____(Please sign above the line)_____

*Any informational mismatch with the i-Cheque makes this reference letter void
*Ask the amount to be paid to bearer for security check

39
 6. Conclusion:-

Bangladesh Bank has issued different circulars time to time regarding modernization of Green

Banking practice and its proper implementation. If every bank in Bangladesh formulate their

work plan following those rules and works collectively only then it will be possible to complete

implementation of Green Banking activities in Bangladesh. It will then helps earth in regaining

Green Environment and ensure safe residence for our off-springs. Only the collective approach

of both the clients and bankers can make this a true.

References

1. Green marketing is Gold - Consumers Want Eco-Friendly Products | - Good for

Business. Air Dye. 20 Jan. 2010.

2. Dr. Aseem Prakash (2002),Green Marketing, Public Policy and Managerial Strategies,

Business Strategy and the Environment. 11, 285297

3. Rashid,M.kurshed. Eyes on Green Banking.thedailystar.net/ new Design /news- details.

08 February 2013

4. Hossan, F. 2012. Green Banking. The Daily Star. 18 November 2012

5. Hayder, M.M. 2012. Green Banking and its Practices in Bangladesh. Term Paper,

Department of Finance and Banking, University of Chittagong. 35pp

6. Atiur Rahman, Financial Services at Peoples Doorstep, Governor, Bangladesh Bank,

2010.

40
7. Suresh Chandra Bihari, Green Banking Socially Responsible Banking in India, The

India Banker, VI, No.1, 2011.

8. Mohmed Aminul Islam, Green Banking: Future Important Issue for Banking Industry,

Financial Express, Regd No. DA 1589, Dhaka, Vol.20, No.381, 2010

9. Rashid, M 2010, Green banking comes to focus Sept. 17, viewed: August 7,2012.

10. Rahman, A. 2012 Green Banking and Sustainable Development: the Case of

Bangladesh, UN Conference on Sustainable Development (Rio+20 Summit) Rio de

Janeiro, Brazil, June 19, 2012

11. Verma, MK 2012, Green Banking: A Unique Corporate Social Responsibility of India

Banks, International Journal of Research in Commerce & Management, Vol no. 3

(2012), Issue no. 1 (JANUARY)

12. www.bangladeshbank.org.bd viewed: July, August, September, October, 2012.

13. Green Banking Policy of BASIC bank ltd, Bangladesh, Head Office, Dhaka,

http://www.basicbanklimited.com/Green_Banking.php

14. Mohmed Aminul Islam, Green Banking: Future Important Issue for Banking Industry,

Financial Express, Dhaka, Vol.20, No.381, 2010.

15. Bangladesh Bank (2010) Review of Corporate Social Responsibility (CSR) Initiatives in

Banks 2008 & 2009. Dhaka, Bangladesh Bank.

16. http://www.bangladesh-bank.org

17. http://www.ucbl.com

18. http: //www.trustbank.com.bd

19. http://www.primebank.com.bd

20. http://www.dutchbanglabank.com

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21. http://www.islamibankbd.com

22. http://www.ebl.com.bd

23. http: //www.shahjalalbank.com.bd

24. http://pubalibangla.com

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