Banks’ green financing surges in Jan-March
Business Report :
Green and sustainable financing provided by the banks increased in the January-March quarter compared with that in the previous quarter.
According to the latest Bangladesh Bank quarterly report on sustainable finance published recently, banks’ investments in green projects increased to Tk 7,927 crore at the end of March, up from Tk 7,620 crore at the end of December 2024 and Tk 6,584 crore in September.
However, NBFIs experienced a decline, with green financing falling to Tk 836 crore in January-March from Tk 1,025 crore in the October-December quarter due to the bleak financial health of the sector.
Sustainable financing, including green financing, increased due to improved economic and political conditions after countrywide disruptions and instability in the wake of political shift on August 5, 2024, bankers said.
They noted that the situation improved, with businesses gradually resuming investments.
Banks were focusing on sustainable financing to avoid risky lending and minimise high non-performing loan burden, they added.
From 2025 onwards, banks and finance companies should set their Green Finance target at 5 per cent and Sustainable Finance target at 40 per cent of their net loans and advances outstanding.
Accordingly, the targets of green finance and sustainable finance for banks and NBFIs are Tk 67,820 crore and Tk 5,42,563 crore respectively.
Green financing represented 9.32 per cent of the total term loan disbursements by banks and 24.5 per cent for NBFIs during the October-December quarter.
Forty-one banks out of 61 and 11 NBFIs out of 34 have had exposure in green finance in the reporting quarter.
Overall, banks’ sustainable financing soared to Tk 1,46,851 crore in March, 2025 from Tk 1,44,992 crore in December and Tk 1,04,424 crore in September, 2024 But, NBFIs’ sustainable financing declined to Tk 2,967 crore in March 2025 from Tk 3,123 crore in December and Tk 1,631 crore in September, 2024. There was no investment in green bond, green Sukuk or impact fund by the banks and NBFIs in the period.
The total utilization of climate risk fund in the January-March quarter was only Tk 0.31 crore.
The total outstanding balance of sustainable finance by banks was Tk 6.04 lakh crore at the end of March.
In the January-March period, banks recovered Tk 75,838 crore and the NBFIs Tk 2,108 crore from their disbursed sustainable loans.
In the period, banks rescheduled Tk 2,007 crore and the NBFIs Tk 55.41 crore in sustainable finance.
Fifty-four banks out of 61 and 14 finance companies out of 34 have had exposure in sustainable finance in the reporting quarter.
The Bangladesh Bank introduced the Sustainable Finance Policy in December 2020.