European Journal of Business and Management www.iiste.org ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online) Vol.7, No.33, 2015 145 Sustainable Banking: Analyzing Pattern of Green Banking In Bangladesh Ummay Sumaiya Mutiatur Rasul * Sultana Shahida Abedin Faculty of Business Administration, Eastern University, House 26, Road 5, Dhanmondi, Dhaka-1205 Abstract The term Green Banking is a new concept in Bangladesh, though the idea is not new. It has shifted the profit maximization goal of banks to ‘planet, people and profit goal’. In Bangladesh, the banks are categorized as FCBs-Foreign Commercial Banks, PCBs- Private Commercial Banks, SCBs- State owned Commercial Banks, SDBs- the Specialized Development Banks. Bangladesh Bank – has issued the Green Banking Guideline in 2011 which is a mandatory policy guideline for all the scheduled Banks operating in the country. This study focuses on how the phase-wise action plan is applicable for all banks operating in Bangladesh are coping up to meet the target within the stipulated deadline. It is found that the SCBs and SDBs are showing constantly poor performance in adopting the idea. It is also mentionable that recently the focus is more on direct green financing to indirect green financing. Some banks are welcoming the idea of ‘going green’ whereas others are still in the dilemma in taking the challenge. Keywords: Green finance, sustainability, environmental risk, online-banking, climate risk fund 1. Introduction Apart from maximizing shareholders value, businesses have responsibility towards the society in general and financial sector, being the steward of all kinds of commercial transactions, has all the more responsibility to steer the economy in a sustainable way. Environment has many direct and indirect effects on a country’s economy and timely intervention of financial institutions can ensure that positive effect is nurtured and maximized. In a bank- depended economy like Bangladesh’s, environmentally-aware and sustainable banking, otherwise and more commonly termed as ‘Green Banking’ thus turns out to be of paramount importance. With that thought in mind, the central bank of the country – Bangladesh Bank – has drafted and enacted the Green Banking Guideline in 2011 which is a mandatory policy guideline for all the scheduled banks as well as other financial institutions to follow. The Green Banking policy mandate as given by Bangladesh Bank (BB) encompasses a holistic approach towards sustainable economy by drawing attention to avenues like – in house environment management, sustainability training, paperless banking, green marketing activities, formation of climate risk fund, environmental risk rating of projects and most importantly green financing. The phase-wise action plan is applicable for all banks operating in Bangladesh hence the paper here tries to show how the different category of banks – namely State- own commercial bank, state-own specialized development banks, public commercial banks and foreign commercial banks are coping up to meet the target within the stipulated deadline. 1.1 Literature review As Socially responsible Corporate Citizens, banks have great responsibility to enhance the efforts taken by the concerned government to attain the target of reducing the emission of harmful carbon (Mani; 2011). Sustainable development thus can be made possible by the timely intervention and planned contribution by the financial institutions and specially Banks. In the book ‘Sustainable Finance and Banking’ the natural progression of banking evolves into sustainable banking from its former defensive banking status to serve as a full-fledged ever-flowing entity (Jeucken; 2001). To popularize the concept of banking towards sustainable development, more often coined as ‘Green Banking’ is thus a significant aspect for the Central bank of Bangladesh – Bangladesh Bank (BB). The governor of BB, Dr Atiur Rahman stated that Green Banking and CSR activities coupled with other measures will lead the country into more broad-based inclusive growth and thus push the country to the fulfillment of vision 2021 mandate (Rahman;2010). On-line banking – a feature of green banking is also gaining momentum as the banking industry is transforming into full digitalization and creating customer satisfaction with internet connectivity whereas reducing the environmental impact of human travel and paper-based banking system (Islam; 2010). However, online banking is not the only aspect of green banking as in reality; Green Banking has a much wider perspective. It normally starts with the vision to protect the environment by considering the environmental aspect before financing a