Regulatory Alerts2024-11-06
Added
SFD Circular No. 02: Green Finance and Sustainable Finance Target and Achievement
Scheduled banks and finance companies operating in Bangladesh must set annual targets for green and sustainable finance at minimum 5% and 40% respectively of the net loan and advance position as of December 31 of the previous year. These targets must not be lower than the previous year's targets and must be submitted by the last working day of January each year, starting from 2025, using the prescribed format in Annexure-1. Compliance with these programs will be considered during the assessment of the banks' and companies' CAMEL ratings. The directive is issued under Section 45 of the Bank Company Act, 1991, and Section 41(2)(d) of the Finance Company Act, 2023, and takes immediate effect.
Bangladesh Bank Head Office Dhaka. Sustainable Finance Department Page 1/2 SFD Circular No.: 02 Date: 06 November, 2024
21 Kartik, 1431 Managing Director/Chief Executive Officer All Scheduled Banks and Finance Companies Operating in Bangladesh Dear Sir, Regarding the determination and achievement of targets for Green Finance and Sustainable Finance. Reference is drawn to your attention to SFD Circular No.- 01/2021, dated: 11 January 2021 and SFD Circular Letter No.- 03/2021, dated: 04 August 2021. 2. It has been decided that, (a) Each scheduled bank and finance company shall determine annual targets for Green Finance and Sustainable Finance at the beginning of each calendar year based on the net loan and advance position (determined by deducting staff loans, total classified loans, and credit card loans from total loans and advances) as of 31 December of the previous year, at minimum 5% and 40% respectively, and ensure their achievement during the relevant year. It is noted that the target for the relevant year shall never be lower than that of the previous year. (b) Starting from 2025, the annual targets for Green Finance and Sustainable Finance shall be submitted by the last working day of January each year in accordance with the attached table (Annexure-1). (c) The achievement of Green Finance and Sustainable Finance programs by banks and finance companies shall be considered during the assessment of their CAMEL ratings and risk management. 4. This directive is issued under the powers conferred by Section 45 of the Bank Company Act, 1991 and Section 41(2)(d) of the Finance Company Act, 2023, and shall take immediate effect. Yours faithfully, (Chowdhury Liaquat Ali) Director (SFD) Phone: 9530320 E-mail: pdf.sfd@bb.org.bd
Bangladesh Bank Head Office Dhaka. Sustainable Finance Department Page 2/2 Annexure-1 Green Finance and Sustainable Finance Targets Name of Bank/Finance Company: Relevant Year/Period: (Million Taka) Total Loans and Advances Position* Staff Loans Position* Total Classified Loans Position* Credit Card Loans Position* Net Loans and Advances Position* Green Finance Target Sustainable Finance Target Previous Year's Target Final Target for Relevant Year Green Finance Sustainable Finance Green Finance Sustainable Finance 1 2 3 4 5 = 1-(2+3+4) 6 = (55%) 7 = (540%) 8 9 10 11 *As of 31 December of the previous year Signature: Name of Reporting Officer: Mobile: Email: Signature: Name of Head of Sustainable Finance Unit: Mobile: Email: