1.1 Rational of the Study

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Deforestation, dissertation, flood, soil erosion, river bank erosion, increased evaporation, Co2 emissions, rising sea-level, displacement, cyclones, Stalinization, arsenic contamination are most burning word in the present world. And all words are related natural disaster and climate change. Because, climate change is the most complicated issue the world is facing. Across the globe there have been continuous endeavors to measure and mitigate the risk of climate change caused by human activity. Another name of this attempt is “Sustainable Development” to us. The process of sustainable development involves all sectors in the economy – Government, NGOs, corporate, citizens and, of course, the financial sector. Our beloved mother land Bangladesh is one most affected country by this climate change. And banking industry of Bangladesh is ahead one step from other financial institutions for taking endeavors to measure and mitigate the risk of climate change caused by human and banking activity. This activity is familiar in banking industry with title of “Green Banking”.

1.1 Rational of the Study

The success of a program like BBA is determined by how successfully the student of this program implemented in the practical life, which they learned from the program. Universities take many steps to make bridge between the academic knowledge and actual business world event of BBA students, Internship program is one of them. Internship is an integral part of BBA Program and it contains 6 credits. This program is actually a juncture of academic and professional life dealings. It is for to get some experience of practical work environment and also be familiar with that. My internship program started at 23 September, 2012 at Shahjalal Islami Bank Limited.

Shahjalal Islami Bank Limited is doing Islamic Banking in Bangladesh. Banking industry of Bangladesh is ahead one step from other financial institutions for taking endeavors to measure and mitigate the risk of climate change caused by human and banking activity. To do Green Banking in Bangladesh Shahjalal Islami Bank limited one of the major among our domestic banks. The world is now become globalize so we have to sustain in the competitive world. We must take the competitive advantage that’s why we cannot avoid the environment while doing business. That’s why I feel very much interest in Green Banking. And it has another importance to me that is implementation of my educational knowledge and theoretical knowledge to the practical.

1.3Objectives of the study

The main objective of the report is to identify the green banking activities practiced by SJIBL, which includes the following specific objectives

1.3.1 Specific Objectives:

The specific objectives of this report are

To draw a clear picture of Green Banking.
To identify the major areas and product of Green Banking.
To examine SJIBL Green Banking policy and implementation.
To investigate the Green Banking policy that adapted by Mirpur Branch.
To give recommendation on the basis of Finding.

1.3.2General Objectives:

The general objective of the report is to analyze the “Green Banking of SJIB”.

1.4 Scope of the Study

We know that Bangladesh is the most preferable playground to play with people life for natural disaster. Deforestation, dissertation, flood, soil erosion, siltation, sedimentation, river bank erosion, increased evaporation, Co2 emissions, rising sea-level, displacement, cyclones, Stalinization, arsenic contamination are most burning word in the present world. And all these words are related natural disaster and very suitable to accommodate in our country. That’s why, Green Banking open a new era for Bangladesh banking industry to create a positive image, increase market value and contribute for developing the country. In our country Shahjalal Islami Bank is the major of welfare driven economy and promoter of balanced growth in a country like Bangladesh which has a poverty stricken contemporary economic background. So SJIBL has a great opportunity to implement their mission, objectives very easily through green banking. By adopting a comprehensive green banking policy, installing new green banking products, considering green banking strategies at time of loan disbursement, developing program for the clients, mass people, and stakeholders to create awareness among them about the environment a bank can easily practice green banking. Bangladesh Bank the central bank of Bangladesh is already placed an order on Green Banking on February 27, 2011for the banking industry. Shahjalal Islami Bank, Mutual Trust Bank Ltd., AB Bank Ltd., Al Arafah Islami Bank Ltd., National Bank Ltd., Uttara Bank Ltd., Rupali Bank Ltd., Jamuna Bank Ltd., Brac Bank Ltd., United Commercial Bank Ltd., Basic Bank Ltd., along with Islami Bank Bangladesh Ltd., are famous for practicing green banking in Bangladesh.

1.5 Methodology

Methodology is the study or theoretical analysis of particular working methods. Adoption of methodology is an important factor in performing any study. If the methodology of the study is properly adopted and the study runs properly according to the methodology, the study is supposed to be successful. The following represents the methodology of the study.

1.6 Methods of Data Collection

1.6.1 Conceptualization:

Conceptualization is the way of developing concepts about the topic and its related matter. The study follows a procedural approach in order to get complete picture of concentration of different banks initiatives to green banking in worldwide and in Bangladesh especially Shahjalal Islami Bank limited.

1.6.2Theoretical Framework

The theoretical framework is focused on the insight of the current process and techniques in related to practice green banking to get sustainability. It emphasizes the green banking policy, green banking strategies, green products and probable key opportunities of the products. And their inter relationship with making the environment green.

1.6.3 Sources of Data

In order to make the report more meaningful and presentable, data is collected from many sources. The data collection sources can be accumulated two sources. Majority of the information was collected from secondary sources.

1.6.4 Primary sources

The “primary sources” are as follows-

Officers
Supervisor
Clients

1.6.5 Secondary Sources

The “Secondary Sources” of data and information are:

Annual Report (Last five years) of Shahjalal Islami Bank Limited.
Periodicals published by Bangladesh Bank.
Various books, articles, compilations etc. regarding green banking functions, and the policies.
Relevant file study as provided by the officers concerned.

1.6.6 Method of data collection:

Face-to-face conversation with the respective officers and staffs of the Branch.
Informal conversation with the investment clients.
Practical work exposures form the different desks of the four departments of the Branch covered.

1.6.7 Data Processing and Analysis:

Collected data and information both from primary and secondary sources were analyzed. Raw data collection from survey and edited and then classified according to the objectives. I have used some techniques for the purpose of analysis. These are:

Theoretical analysis
Graphical analysis
Tabular analysis

1.6.8 Preparation of the Report:

Following steps are associated with the preparation of this thesis:

Representations of the assembled data through graph
Preparation of the draft report
Preparation of the final report

Flow Chart of Methodology

Following is the flow chart of the study:

1.7 Limitations of the Study

It is obvious that every study has some limitations. The study I have made is of great importance and require me huge work. While conducting I had to face a number of problems. Which called limitations of my report? Those constraints that hampered my smooth workings in bank and finally in preparing this report are as follows:

The time period of this study is very short. We had only 12 weeks in my hand to complete this report, which was not enough. So I could not go in depth of the study.
Most of the times, the officials were busy and were not able to give me much time.
Green Banking Technology is newly come to our country, so, there is no accurate information available.
There were some restrictions to have access to the information confidential by concern authority.
I have no proper experience to do this kind of report. So, inexperience creates obstacles to follow the systematic and logical research methodology.

Chapter TWO

Organizatinal Overview

2.1 Background of the organization

Shahjalal Islami Bank Limited (SJIBL) commenced its commercial operation in accordance with principle of Islamic Shariah on the 10th May 2001 under the Bank Companies Act, 1991. During last eight years SJIBL has diversified its service coverage by opening new branches at different strategically important locations across the country offering various service products both investment & deposit. Islamic Banking, in essence, is not only INTEREST-FREE banking business, it carries deal wise business product thereby generating real income and thus boosting GDP of the economy. Board of Directors enjoys high credential in the business arena of the country, Management Team is strong and supportive equipped with excellent professional knowledge under leadership of a veteran Banker Mr. Muhammad Ali. Name of the Company Shahjalal Islami Bank Limited Legal Form A public limited company incorporated in Bangladesh on 1st April 2001 under the companies Act 1994 and listed in Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited. Commencement of Business 10th May 2001.

2.2 SJIBL’s Vision

To be the unique modern Islami Bank in Bangladesh and to make significant contribution to the national economy and enhance customers' trust & wealth, quality investment, employees' value and rapid growth in shareholders' equity.

2.3 SJIBL’s Mission

To provide quality services to customers.
To set high standards of integrity.
To make quality investment.
To ensure sustainable growth in business.
To ensure maximization of Shareholders' wealth.
To extend our customers innovative services acquiring state-of-the-art technology blended with Islamic principles.
To ensure human resource development to meet the challenges of the time.

2.4 SJIBL’s Strategies

To strive for customers best satisfaction & earn their confidence.
To manage & operate the Bank in the most effective manner.
To identify customer’s needs & monitor their perception towards meeting those requirements.
To train & develop all employees & provide them adequate resources so that the customer’s needs are reasonably addressed.
To promote organizational efficiency by communicating company plans, polices & procedures openly to the employees in a timely fashion.
To cultivate a congenial working environment.
To diversify portfolio both the retail & wholesale markets.

2.5 SJIBL’s Motto

Committed to Cordial Service.

2.6 Corporate Information

Name of the Company / Shahjalal Islami Bank Limited
Legal Form / A public limited company incorporated in Bangladesh on 1st April 2001 under the companies Act 1994 and listed in Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited.
Commencement of Business / 10th May 2001
Head Office / UdaySanz, Plot No. SE (A)
2/B Gulshan South Avenue,
Gulshan - 1, Dhaka-1212.
Telephone No. / 88-02-8825457,8828142,8824736,8819385,8818737
Fax No. / 88-02-8824009
Website /
SWIFT / SJBL BD DH
E-mail /
Chairman / Alhaj AnwerHossain Khan
Managing Director / Md. Abdur Rahman Sarker
Auditors /
M/S. HodaVasiChowdhury& Co.
Chartered Accountants
IspahaniBhaban
14-15 Motijheel C/A
Dhaka-1000
Phone: 88-02-9555915, 9560332
Tax Advisor / M/S K.M Hasan& Co.
Chartered Accountants
87, New Eskaton Road
Dhaka.
Phone: 88-02-9351457, 9351564
Legal Advisor / Hasan& Associates
Chamber of Commerce Building
(6th floor), 65-66 Motijheel C/A, Dhaka
No. of Branches / 79
No. of ATM Booth / 14
No. of SME Centers / 06
Off-Shore banking Unit / 01
No. of Employees / 1,671
Stock Summary:
Authorized Capital / Tk. 6,000 million
Paid up Capital / Tk. 4453 million
Face Value per Share / Tk. 10

2.7 Shariah Council

Shariah Council of the Bank is playing a vital role in guiding and supervising the implementation and compliance of Islamic Shariah principles in all activities of the Bank since its very inception. The Council, which enjoys a high status in the structure of the Bank, consists of prominent ulema, reputed banker, renowned lawyer and eminent economist. Members of the Shariah Council meet frequently and deliberate on different issues confronting the Bank on Shariah matters. They also conduct Shariah inspection of branches regularly so as to ensure that the Shariah principles are implemented and complied with meticulously by the branches of the Bank.

2.8 SJIBL’s Deposit Schemes

Mudaraba Monthly Income
Mudaraba Double Money
Mudaraba Monthly Deposit
Mudaraba Millionaire
Mudaraba Haji Deposit
Mudaraba Housing Deposit
Mudaraba Small Business
Mudaraba Cash Waqf Deposit
Mudaraba Lakhopoti Deposit
Mudaraba Bibaho Deposit
Mudaraba Mohorana Deposit
Mudaraba Shikhkha Deposit

2.9 Account services

Al Wadiah Current Deposits (ACD)
Mudaraba Saving Deposits (MSD)
Mudaraba Term Deposits (MTD)
Mudaraba Short Notice Deposits (MSND)

2.10FINANCIAL highlights of the Bank (Amount in millions)

PARTICULARS / 2011 / 2010 / 2009 / 2008 / 2007
Paid up Capital / 4,453 / 3,425 / 2,740 / 2,245 / 1,871
Total Capital ( Core + Supplementary) / 9,183 / 7,746 / 5,429 / 4,069 / 3,040
Capital Surplus / 1,131 / 826 / 1,546 / 1,122 / 1,189
Total Assets / 107,229 / 78,800 / 58,920 / 45,216 / 28,346
Total Deposit / 83,350 / 62,964 / 47,459 / 36,484 / 22,618
Total Investment (Loans & Advance) / 80,592 / 61,440 / 43,958 / 32,918 / 20,616
Total Contingent Liabilities and Commitment / 34,083 / 27,665 / 14,475 / 10,771 / 7,471
Investment Deposit Ratio ( % ) / 93 / 97.58% / 92.62% / 90.23% / 91.15%
Percentage of Classified Investment against total In / 1.89% / 1.91% / 0.94% / 0.44% / 0.62%
Profit after Tax and Provision / 1,168 / 2,072 / 1070 / 817 / 646
Amount of Classified Investment / 1,523 / 1,173 / 413 / 143 / 128
Provisions kept against classified Investment / 423 / 268 / 118 / 28 / 23
Provisions surplus / 127 / 88 / 98 / 20 / 10
Cost of Fund / 10.98 / 10.15% / 11.07% / 10.99% / 10.40%
Profit Earning Assets / 92,569 / 67,139 / 53,131 / 39,889 / 25,303
Non-Profit Earning Assets / 14,660 / 11,660 / 5,789 / 5,327 / 3,043
Return on General Investment (%) / 13.53 / 11.90 / 13.46 / 14.18 / 14.68
Return on Assets (ROA) / 1.26% / 3.01% / 2.08% / 2.22% / 2.28%
Earning Per Share / 2.62 / 4.65

CHAPTER Three

Green Banking

3.1 WHAT IS GREEN BANKING

Green Bank means

An ethical bank
A socially responsible bank
A sustainable bank.

Green Banking is to support:

Innovative green products
Activities those are not hazardous to environment and help conserve environment.

3.2 WHY GREEN BANKING

To help safeguard the planet from

unusual weather pattern;
rising greenhouse gas;
Declining air quality.

For ensuring green economic growth: economic growth which is sustainable.
To meet one of the Millennium Development Goals: Ensure Environmental Sustainability.

3.3 DEFINITIONS OF GREEN BANKING

3.3.1 IN GENERAL focus

Green Banking is like a normal bank' which considers the entire social and environmental factors; it is also called as an ethical bank' Ethical banks have started with the aim of protecting the environment.

3.3.2 The Broad focus

Green banking refers to the efforts of the Banking sector to keep the environment green and to minimize greenhouse effects through rationalizing their strategies, policy, decisions and activities pertaining to banking service, business and in-house operational activities. Green banking may be seen as a component of the global initiative from Banks end to save environment. Green banks or environmentally responsible banks do not only improve their own standards but also affect socially responsible behavior of other business. Green banking can benefit the environment either by reducing the carbon footprint of consumers or banks. Green banking means combining operational improvements and technology, and changing client habits.

3.3.3 The definitions derived from specialists:

Sherman stresses (Key Differentiator of Green Choice Bank, Chicago):

“With green banking, what sets leaders apart from the rest is...how you invest back in the community, so we are trying to develop loan products and deposit products that reward good environmental choices”.

Justin Pritchard (columnist, about com): “Green Bank is a bank focusing on sustainability. It is bank like others but they are to claim the "green banking” niche, and they hope to excel by serving companies and individuals interested in green business. For the most part, the bank will work with businesses that find ways to do more and use less”.

3.3.4 GREEN BANKING & SUSTAINABLE GROWTH

Sustainable development meets the need of present generation without compromising the ability of future generation to meet their own needs. The key to sustainable development is to ensure broad-based inclusive economic growth, with:

Promotion of natural resources;
Preservation of regenerating capacity of ecological system;
Avoidance of environmental risks on future generations.

Banking sector can play an intermediary role between economic development and environmental protection.

3.3.5 IDEAL BENEFITS OF GREEN BANKING

Basically Ethical (Green) banking avoids as much paper work as possible and rely on online/electronic transactions for processing so that you get green credit cards and green mortgages. Less paperwork means less cutting of trees.
Creating awareness to business people about environmental and social responsibility enabling them to do a environmental friendly business practice.
Green (Ethical) banks adopt and implement environmental standards for lending, which is really a proactive idea that would enable eco-friendly business practices which would benefit our future generations.
When you are awarded with a loan, the interest of that loan is comparatively less with normal banks because ethical banks give more importance to environmental friendly factors - ecological gains. Natural resources conservation is also one of the underlying principles in a green bank while assessing capital/operating loans to extracting/industrial business sector.

3.4 GREEN BANKING PRODUCTS

Until a few years ago, most traditional banks did not practice green banking or actively seek investment opportunities in environmentally-friendly sectors or businesses. Only recently have these strategies become more prevalent, not only among smaller alternative and cooperative banks, but also among diversified financial service providers, asset management firms and insurance companies. Although these companies may differ with regard to their stated motivations for increasing green products and services (e.g. to enhance long-term growth prospects, or sustainability principles on which a firm is based), the growth, variation and innovation behind such developments indicate that we are in the midst of a promising drive towards integrating green financial products into mainstream banking.

This product and service review is divided into the following banking sectors:

Retail Banking
Corporate & Investment Banking
Asset Management
Insurance

3.5 Green Banking and Bangladesh Banking Industry: