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2020-09-09

Added 2026-08-09 · Updated 2026-08-13

SFD Circular Letter No. 05: Regarding Green Finance Target

The document amends the baseline for calculating the green finance target for all scheduled banks and financial institutions in Bangladesh, shifting the denominator from total funded loans/investments to total medium-term loans/investments (excluding employee loans). It mandates that these institutions ensure at least 5% of this new baseline is allocated to environmentally friendly projects identified or recognized by Bangladesh Bank. Additionally, it requires all scheduled banks and financial institutions to establish Green Banking Units in their head offices and all branches to facilitate green finance initiatives, with performance in green banking considered in their CAMEL ratings. These instructions are issued under the powers granted by Section 45 of the Companies Act, 1991, and Section 18(6) of the Financial Institutions Act, 1993, and take immediate effect.

Bangladesh

Bangladesh Bank

Sustainable Finance Department Bangladesh Bank Head Office Dhaka. SFD Circular Letter No: 05 Date: September 09, 2020

Bhadra 25, 1427 Managing Director/Chief Executive Officer All Scheduled Banks and Financial Institutions Operating in Bangladesh Dear Sir, Regarding the achievement of environmentally friendly asset targets.

Reference is drawn to your attention to SFD Circular No. 04 dated September 04, 2014, issued by the Sustainable Finance Department. In the aforementioned circular, it was determined that for all banks and financial institutions from January 2016, the target for environmentally friendly assets would be 5% of their total distributed funded loans/investments.
Now, it has been decided that, (a) To monitor the achievement/progress of environmentally friendly assets by banks and financial institutions, the rate of environmentally friendly assets will be considered based on the total distributed medium-term loans/investments (excluding employee loans). Banks and financial institutions must ensure that this rate achieves at least 5%. (b) In the case of financing environmentally friendly products/projects/initiatives identified/recognized by Bangladesh Bank from time to time, the aforementioned rate will be considered. (c) The progress of the green banking program of banks and financial institutions will be considered in their CAMEL rating assessment.
Furthermore, to enhance support for environmentally friendly assets, provide advice, and accelerate them, instructions are given to all scheduled banks and financial institutions to establish Green Banking Units in their Head Offices and all branches/offices. The operations of the aforementioned Green Banking Units will be conducted under the supervision of the 'Sustainable Finance Unit' at the Head Offices of banks and financial institutions, aiming to achieve environmentally friendly asset targets and conduct all green banking activities.
These instructions are issued under the powers granted by Section 45 of the Companies Act, 1991, and Section 18(6) of the Financial Institutions Act, 1993, and will take immediate effect.

These instructions will take immediate effect.

Yours faithfully, (Khandaker Morshed Milon) General Manager Phone: 9530320 CC: sfd.bangladeshbank.gov.bd ms.sfd@bangladeshbank.org.bd