Pakistan's central bank issues guidelines for 'green' banking

Pakistan Forward

ISLAMABAD -- The State Bank of Pakistan (SBP) has introduced Green Banking Guidelines (GBGs) and has asked banks and development finance institutions (DFIs) to implement them within a year, Dawn reported Monday (October 16).

The banks and DFIs are receiving encouragement to lend generously to environmentally friendly projects, a senior executive at one of the top banks told Dawn.

Those institutions will have to ensure that overall general financing meets provincial, national and global environmental benchmarks, said the executive.

Under the guideline, the banks and DFIs are also required to make their infrastructure and operations environmentally friendly.

The SBP wants "indicative but not exhaustive" green financing portfolios for lending for alternative energy (wind, solar, biomass and other renewable energy sources), sewage treatment, water conservation, waste disposal, wastewater treatment and public transport.

The banks and DFIs are encouraged to earmark a certain percentage of their overall financing and investment portfolio as a dedicated fund for green investment, according to Dawn.

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