SFD Circular No. 01: Environmental Initiatives in Establishment Construction and Business Centre Expansion as well as Utilization of Climate Risk Fund by Banks and FIs

Page 1 of 2 Sustainable Finance Department Bangladesh Bank Head Office Dhaka Website: www.bb.org.bd SFD Circular No: 01 Date: May 11, 2016 28, 1423 BS Managing Director / Chief Executive Officer All Scheduled Banks and Financial Institutions Operating in Bangladesh

Dear Sir,

Regarding the adoption of environmentally friendly programs in the establishment construction and business center expansion of banks and financial institutions, and the utilization of the Climate Risk Fund.

In accordance with Section 1.3 of the environmentally friendly banking policy issued to banks and financial institutions through BRPD Circular No-02/2011 dated February 27, 2011; GBCSRD Circular No-04/2013 dated August 11, 2013; and GBCSRD Circular Letter No-05/2013 dated September 11, 2013, instructions have been given to banks and financial institutions to adopt environmentally friendly initiatives and programs in the management of their own offices and establishments.

Furthermore, there is no alternative but to take steps to support sustainable development in the financial sector in line with the implementation of the Government of Bangladesh's "National Environmental Strategy and Action Plan 2010-2021" and the Sustainable Development Goals announced by the United Nations and adopted by the Government of Bangladesh. Additionally, in the recent meeting of the National Environment Conservation Board, the Honorable Prime Minister has instructed the adoption of any type of environmentally friendly construction program (Green Building, Rainwater Harvesting, Solar Power).

2. In this context, all scheduled banks and financial institutions must comply with the following instructions regarding the construction of new establishments and the expansion of business centers:

a) During the construction of any new establishment, arrangements must be made for Green Building and Rainwater Harvesting. If water bodies exist in the construction area, they must be preserved. If no water body exists, a new water body must be created to retain rainwater. This water can be used as needed and can help avoid flooding.

b) During the construction of any new establishment, Solar Power Panels must be installed.

c) If a new branch or business development center is opened in a rented or leased establishment, the said establishment must have Green Building, Rainwater Harvesting, and Solar Power.

d) All scheduled banks and financial institutions must install Green Building, Rainwater Harvesting, and Solar Power in all their existing own establishments by December 31, 2018 (by December 31, 2020 for state-owned banks).

Page 2 of 2

3. In the case of any loan/investment and grant disbursement, the lending/granting bank/financial institution must ensure whether the potential borrower/beneficiary has installed Green Building and Rainwater Harvesting in all new establishments (constructed/under construction after the issuance of this circular) related to the loan/grant. Additionally, in the case of loan/investment and grant disbursement to government institutions, the lending/granting bank/financial institution must ensure whether the potential borrower/beneficiary has installed Solar Power in all new establishments related to the loan/grant (constructed/under construction after the issuance of this circular).

4. Scheduled banks and financial institutions may provide grants (donations) or loans at reduced interest rates to government educational institutions (schools and colleges), government hospitals, and non-profit organizations (NGOs) that provide free or very low-cost education and medical services to the relatively underdeveloped, backward, and deprived communities of the country for the installation of Green Building, Rainwater Harvesting, and Solar Power. Such grant provision or loans will be considered as the utilization of the 'Climate Risk Fund' and must be accounted for in accordance with GBCSRD Circular No: 04/2015.

5. These instructions are issued under the powers conferred by Section 45 of the Bank Company Act, 1991 (amended up to 2013) and will take effect immediately.

Yours faithfully,

(Manoj Kumar Biswas) General Manager Phone: 9530320 CC: sfdl.nranging@bb.org.bd ms.mnpngt@bb.org.bd