BB directs banks to form sustainable finance units

The central bank has asked financial institutions to create a sustainable finance unit, to help the country achieve the sustainable development goals or SDGs.

The unit, which has to be formed in 45 days, will also take care of green banking and corporate social responsibility initiatives.

"With the formation of the sustainable finance unit, green banking unit and CSR cell in banks and non-bank financial institutions will be abolished," Bangladesh Bank said in a notice on Thursday.

The unit will be led by the chief of risk management division and a senior deputy managing director will chair the sustainable finance committee.

Green banking and CSR activities of banks and non-banks will be strengthened with the move, the regulator said.

The United Nations in September this year adopted 16 sustainable development goals or SDGs with 169 targets to guide the world tackle poverty, inequality, governance, climate change etc till 2030.

Bangladesh is a signatory in the SDGs, which have replaced millennium development goals or MDGs in 2015.

Bangladesh has taken a strong move under the leadership of the Prime Minister's Office to implement SDGs successfully.

Bankers have welcomed the BB move and said the sustainable finance unit would make people conscious about environmental and social issues.

"Sustainability is not only an environmental issue. It also takes into account economic and social issues, labour practices, human rights, economic performance, community, society, corruption, corporate governance and responsibility regarding products and services," said Touhidul Alam Khan, deputy managing director and chief business officer of Prime Bank.

Khan, who is also the first Certified Sustainability Reporting Assurer in Bangladesh, also said without a sustainable business model, environmental and social issues will continue to badly impact economy and compromise future needs.

The BB initiative is a timely move toward implementation of SDGs and supporting the environment-friendly banking, he said.