Green Banking

Green banking is a new notion that contributes to environmental sustainability. This article focuses on the meaning of Green Banking, Green Banking in India and the benefits of Green Banking.

Economic growth is influenced by the banking industry, both in terms of quantity and quality, resulting in a shift in the nature of economic growth. Green banking may help banks obtain a competitive edge in the industry by making an impact in their strategy-making process. Green banking is a proactive technique of conserving energy and protecting the environment. The primary advantage of green banking is that it protects the environment for future generations. Green banking minimizes paperwork to the greatest extent possible and concentrates on electronic transactions such as ATM, mobile banking, and other forms of electronic banking by customers. Electronic transactions not only contribute to sustainability, but they also give convenience to both clients and banks. 

Meaning of Green Banking

 Green banking refers to the promotion of environmentally friendly practices and the reduction of the bank’s carbon footprint. It’s similar to a traditional bank because it examines all social, environmental, and ecological concerns with the goal of protection and conservation of natural resources and the environment.

The primary goal of this banking concept is to improve the conservation of the earth’s environment, habitats, and resources. What is the best way to go about it? 

  1. Encourage people to use online banking instead of branch banking.
  2. Online bill payment.
  3. Using online banking instead of huge multi-branch banks to open CDs and money market accounts.

 green bank is a governmental or quasi-public financial entity that works with the private market to promote the development of clean energy technology using innovative financing approaches and market development instruments.

Advantages of Green Banking

  • Ethical (Green) banking, in general, eliminates as much paper as possible and instead relies on online/electronic transactions to complete transactions, resulting in green bank cards and green mortgages.
  • Less paperwork implies fewer trees will be taken down.
  • Increasing business people’s knowledge of environmentalism so that they can engage in environmentally beneficial business practices.
  • Environmental norms for lending are adopted and implemented by green (ethical) banks, which benefit future generations.
  • When you are given a mortgage, the interest rate is lower than it would be with a traditional bank since ethical banks place a higher value on environmentally favorable variables such as ecological gains.
  • Green banks place a higher value on environmentally friendly variables such as ecological gains, resulting in lower lending interest rates.
  •  All new clients who open “green accounts” will receive cashback.

Green Banking in India

In recent years, Indian banks have noticed the developing tendency and have significantly altered their operational tactics. The Indian banking industry has faced numerous problems, including changes in customer behavior, technology advancements, regulatory changes, and so on. It has gone through a series of challenges and has learned to adapt to changing circumstances. Going green is a new notion in India, and Indian banks have embraced it in a variety of ways. The following are the different banks in India that offer green banking services to their users. 

  • SBI has begun to implement a green banking policy. This is India’s first green bank, specializing in going green and encouraging green energy projects. 
  • Punjab National Bank: They’d made a number of efforts to reduce emissions and energy use.
  • Bank of Baroda: They had undertaken a number of green banking efforts, including the funding of a commercial project. BOB prefers green initiatives that are environmentally benign, such as windmills, biomass, and solar electricity, because they assist in collecting carbon credits.
  • Canara Bank has incorporated eco-friendly measures like mobile banking, online banking, telebanking, and solar-powered biometric processes as part of its green banking effort.


The term “green banking” refers to bank initiatives that support environmentally sustainable investing. Green banking is an innovative and forward-thinking approach to long-term sustainability. It is critical for banks to be proactive in order to increase the economy’s rate of growth. Because environmental conditions are always changing, banks confront severe competition in the worldwide market. Banks can reclaim the return of investment and make polluting enterprises more environmentally friendly by including environmental issues into their lending activities. Green banks are growing rapidly as viable alternatives to regular banks, particularly as customers start questioning the long-term durability of fossil fuels as a source of energy. The ongoing stigmatization of fossil energy may result in a decreased inflow of capital to fossil fuel companies, eventually leading to the industry’s extinction and increased adoption of green power solutions.