Driving green finance with focus on innovation

Md. Ziaur Rahman
Deputy Managing Director (DMD) & Chief Risk Officer (CRO), Prime Bank

The Daily Star (TDS): How would you assess the current state of sustainable banking in Bangladesh?

Md. Ziaur Rahman (MZR): Bangladesh's journey towards sustainable and green banking reflects a growing commitment to environmentally responsible finance, largely propelled by regulatory leadership from Bangladesh Bank and rising awareness within the financial sector. Since 2011, Bangladesh Bank has championed sustainable finance through comprehensive policy frameworks, refinancing schemes, and mandatory reporting requirements. These efforts have positioned Bangladesh as a regional leader in integrating green banking practices, especially among developing nations.

Given Bangladesh's status as a developing economy and its acute vulnerability to climate change, sustainable banking must transcend financial strategy — it should be embraced as a national imperative. The banking sector holds significant potential to voluntarily lead the transition towards a low-carbon, climate-resilient economy.

TDS: What sustainable financing/refinancing schemes does your bank offer, particularly for SMEs, women entrepreneurs, or other environmentally responsible enterprises?

MZR: Bangladesh Bank has introduced a range of refinance schemes designed to empower SMEs, women entrepreneurs, and environmentally responsible enterprises. Prime Bank is proud to be a participating institution in all of these initiatives through formal agreements with Bangladesh Bank. These refinance schemes have significantly enhanced our customers' access to affordable financing, offering lower interest rates, collateral-free loans, and opportunities for employment generation. To ensure seamless delivery, our relationship managers have undergone comprehensive training and awareness programmes focused on these specialised financial products. In 2024 alone, Prime Bank facilitated BDT 288 crore in financing for environmentally friendly projects and initiatives, demonstrating our strong commitment to sustainable development and inclusive growth.

TDS: What initiatives has your bank undertaken to promote sustainable banking, and what measures have you implemented to reduce your own carbon footprint?

MZR: Prime Bank integrates sustainability across operations, lending, and risk management. Internally, it has introduced energy-efficient lighting, HVAC systems, insulation, motion-sensor technology, and low-energy appliances, while ergonomic workplace designs enhance productivity and reduce waste. Digital statements, e-signatures, and cloud-based documentation have significantly reduced paper use, and the Bank is transitioning its vehicle fleet towards hybrid and electric models.

In financing, Prime Bank embeds ESG principles into lending and investment, focusing on renewable energy, energy efficiency, recycling, waste management, green buildings, and sustainable industries. It actively supports sustainable agriculture — including integrated farming, horticulture, livestock, fishery, agro-forestry, and apiculture — as well as CMSMEs, building resilience and promoting financial inclusion.

For risk management, every transaction undergoes Environmental and Social due diligence. Activities on exclusion lists are rejected, and projects are classified by risk level. High-risk cases require Board approval and corrective action plans. A dedicated Sustainable Finance Unit ensures ESG standards, transparency, and accountability remain central to operations.

TDS: What challenges has your bank encountered in adopting and promoting sustainable banking practices?

MZR: A major hurdle is the limited awareness and understanding among both customers and bank employees, which leaves many potential borrowers ill-informed or unprepared to access green financing options. Deeply rooted traditional banking practices make the transition to sustainable models a cultural shift that institutions must actively embrace.

Regulatory enforcement and monitoring mechanisms are still maturing, often resulting in compliance that is more symbolic than substantive. Furthermore, upgrading infrastructure such as installing solar-powered branches or adopting energy-efficient systems demands substantial upfront investment, which can deter rapid adoption.

TDS: What are your bank's future plans to advance sustainable banking, and what support do you seek from the government?

MZR: We are scaling up our sustainable agriculture, SME, and women entrepreneur financing programme, empowering more businesses with the resources and guidance they need to embrace environmentally responsible practices. We believe that collaboration is the cornerstone of progress, and we are actively building stronger alliances with global institutions to harness greater expertise and mobilise impactful resources.

Looking ahead, we are integrating advanced ESG analytics into our investment strategies, ensuring that every financial decision not only delivers solid returns but also fosters a more inclusive and sustainable world. This is just the beginning, and we are energised by the possibilities that lie ahead. To truly amplify our impact in sustainable finance, collaboration between the public and private sectors, supported by regulatory bodies and government authorities, is essential.

Targeted incentives such as tax relief and subsidies for green initiatives can significantly accelerate the adoption of sustainable practices across industries. Equally important is the establishment of clear, consistent regulations for sustainability reporting and carbon emissions. These frameworks would foster transparency, create a level playing field, and encourage more businesses to embrace eco-friendly operations. Access to government-backed risk-sharing mechanisms would empower financial institutions to support bold, high-impact projects, especially in renewable energy and green infrastructure, by mitigating investment risks and unlocking greater innovation.

Public-private partnerships focused on sustainability offer a powerful avenue to combine resources, expertise, and vision. Together, we can catalyse large-scale, transformative change and pave the way for a more resilient, inclusive, and sustainable future.