New Rule For Bangladesh Based Financial Institutions: 2% Of Total Loan Amount Must Be Allotted For Green Projects

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Bangladesh’s central bank has made it mandatory for 2% of all loans issued by the nation’s banks and other financial institutions to be devoted to green projects, including renewable energy facilities.

“The achievements of the banks and financial institutions in green banking and sustainable financing will be taken into consideration in [the] case of their CAMELS and sustainability rating,” said the central bank in a circular on Monday, referring to the international banking authority rating system which assesses capital adequacy, asset quality, management, earnings, liquidity, and sensitivity.

Policy The move came after the central bank last month published sustainable finance policy for lenders as part of a government effort to achieve the UN’s sustainable development goals.