Full Chapter Bilna.docx

CHAPTER 1 INTRODUCTION

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1.1 INTRODUCTION Sustainable development and preservation of environment are now recognised globally as Overriding imperatives to protect our planet from the ravages inflicted on it by mankind. Various global initiatives are underway to counter the ill effects of development that we encounter today such as global warming and climate change. A common thread running across all these initiatives is the focus on reducing the demand for fossil fuels by implementing the 3R's viz. Reduce, Reuse and Recycle.

It must take into consideration that increased carbon emissions and reckless development without paying attention to environment, led to climate change. Many research studies have pointed out direct correlation with climate change and occurrences of natural disasters. It is believed that natural disasters are bound to increase in future, if we neglect the environment. The disastrous impact of recent floods, droughts, storms and excessive heat around the world, motivate us to think seriously and to do whatever we can to address the problem of global warming (IRDBT, 2014).The world is very much concerned about the environmental issues in the global economy.

Banks and financial institutions can play a major and decisive role in these global efforts to make our planet a better place to live in. As providers of finance, banks can ensure that businesses adopt ecofriendly activities. Incentives by way of offering cheaper funds for adopting green technologies will have a long term beneficial impact on the environment. As major implementers of technology, banks themselves can adopt green practices and thereby lead the way in this global initiative. Also, product and service innovations and leveraging on the use of technology enable banks and their customers today to reduce the usage of resources such as paper, thereby aiding in environmental protection .Offering cheaper funds for adopting green technologies will have a long term beneficial impact on the environment. As major implementers of technology, banks themselves can adopt green practices and thereby lead the way in this global initiative. (IDRBT, 2013)

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1.2 NEED OF THE STUDY Banking sector plays a crucial role in promoting environmentally sustainable and socially responsible investment. Today environmental sustainability is an important issue and green banking is a step in this regard. Green banking can benefit the environment either by reducing the carbon footprint of consumers or banks. Either a bank or a consumer can conserve paper and benefit the environment. Ideally, a green banking initiative will involve both. Hence there is a need to study the green banking practices in scheduled commercial banks.

1.3 STATEMENT OF THE PROBLEM Green banking is emerging concept in banking sector.so this paper deals with the green banking practices of schedules commercial banks special reference to perumbavoor area.

1.4 OBJECTIVES OF THE STUDY The objectives of the study are: 1. To study the concept of green banking. 2. To identify the steps necessary to adopt green banking. 3. To check the green banking practices in banks.

1.5 SCOPE OF THE STUDY The study is confined to 10 banks in Perumbavoor during the period of September 2017 - February 2018.It is an area inhabited by peoples of different occupation, income groups etc. Moreover, it has a number of banks incorporated in different sectors provide green banking services.

1.6 SIGNIFICANCE OF THE STUDY Banks are the major economic agents influencing the industrial sector for lending and financing the projects. They are playing an important role in promoting a sustainable

environment. They persuade the economic development and growth of the

country. As society is now more concerned and aware about the environmental issues, there is need for banks to adopt green strategies into their operations. Green Bank is like a 3

normal bank, which considers all the social and environmental / ecological factors with an aim to protect the environment and conserve natural resources. Their purpose is to perform banking activities but with an additional plan towards taking care of earth’s ecology, environment, and natural resources including biodiversity. Green banking is making technological improvements, operational improvements and changing client habits in the banking sector. It means to promote environmental friendly practices and to reduce the carbon footprint from banking operations. This study is with a vision of future sustainability.

1.7 RESEARCH METHODOLOGY 1.7.1 Research Design Green Banking is comparatively a new development in the financial world. It is a form of banking taking into account the social and environmental impacts and its main motive is to protect and preserve environment. The main aim of the study is to know the green banking practices in scheduled commercial banks.

1.7.2 Sources of Data The study is based on both primary and secondary data.

a) Primary Data The type of data was descriptive and explanatory in nature and the method of data collection was sample survey. A sample of 30 bank employees from 10 banks in Perumbavoor has been used to collect the primary data. b) Secondary Data The secondary data source for the study includes books, journals, Periodicals, publication of various banking institutions and internet etc.

1.7.3 Population The study area is perumbavoor. 30 bank employees from 10 banks in the city are taken as samples. Population comprises of all banks offer green banking products.

1.7.4 Sampling Technique Judgemental sampling method was used for collecting sample. Perumbavoor city is the location chosen as the most representative place for data collection. Inclusion criteria were whether banks used green banking services 4

1.7.5 Sample size It is not possible to collect information for the study from the whole population, as it is very large and scattered over wide area. Owing to the limited scope of the study the sample selected was 30 bank employees from 10 banks.

1.7.6 Tools of Data Collection Questionnaire method was used for data collection .Questionnaire consist of questions related to green banking practices in scheduled commercial banks.it consist of 215 questions which are structured and questions are measured rank point scale from 1 to 3.

1.7.7 Tools of Data Analysis Tools of data analysis include tables, graphs, percentage analysis and frequency.

1.8 LIMITATION OF THE STUDY  The study is restricted to Perumbavoor area  This study suffers from inherent limitation of sample survey.  Time constrain is another limitation of the study.

1.9 CHAPTER SCHEME The chapter scheme includes the following chapters: Chapter1: Introduction Chapter2: Review of literature Chapter3: Theoretical framework Chapter4: Data analysis and Interpretation Chapter5: Findings, Suggestions and Conclusions

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CHAPTER-2 REVIEW OF LITERATURE

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1. Sharma, Gopal et al. (2014) attempt to study the level of consumer awareness of Green Banking initiative in India with special reference to Mumbai. From the primary survey they conducted they find that surprisingly even those people who are using online facilities provided by their banks nearly three fourth of them are unaware of the term Green Banking. They find that among those who are aware of Green Banking term consider it mainly related to online bill payment and cash deposit system. Other Green Banking aspects like Green CDs, solar powered ATM, bonds for environment protection are among few of which consumers are not aware of. They also attempt to analyze the gender based difference in awareness of green initiatives by bank specially E-Statements, Net Banking and Green loans. Using Chi-Square test for hypothesis testing they arrive at a result that both males and females have the same level of awareness with respect to Green Banking. The researcher’s state that the major obstacle in Green Banking is the technical issues involved followed by lack of education.

2. Jaggi (2014) studies the initiative by SBI and ICICI on Green Banking. SBI has introduced a Green Channel Counter, no queue banking, enhanced commitment towards achieving carbon neutrality, online money transfer, wind farms. Green Products and Services initiative of ICICI Bank includes instabanking (anytime, anywhere), vehicle finance and home finance. Moreover these banks have taken other steps for energy conservation like duplexing (two side printing), recycling, CFLs, carpool etc.

3. .Sudhalakshmi and Chinnadorai (2014) present the status of Indian Banks in respect of Green Banking and state that though goes green mantra is essential for emerging economies like India but significant efforts have not been taken. Banks are required to include their green aspect in the lending principle. Every step taken today will mean a better global environment in future. So a policy measure to promote Green Banking is needed in India. Indian banks are running behind time in adoption of this green phenomenon. Serious steps are required to be taken in this regard. 7

4. Jha and Bhome (2013) conduct a similar survey as stated above to check and thereby create consumer awareness on Green Banking. Conducting interviews and using specially structured questionnaires for survey they state certain steps needed in Green Banking. Online Banking, Green Checking Accounts (ATM, Special Touch Screens), Green loans (low rate to those who wish to buy solar equipments) for supporting environment friendly residential projects, power saving equipments, Green Credit Cards, Paper Saving Mobile Banking are among few steps suggested by them. Green Banking will ensure organization’s move towards sustainability.

5. Rajput, Kaur et al. (2013) aims to understand how Indian banks respond to environmental changes and the action taken in respect of Green Banking. They find that there is a small group of banks in India that lead in environmental aspect. Response of Indian banks towards international initiative for environment is sluggish. In the United Nation Environment Programme Finance Initiative there is no single Indian signatory. Using factor analysis they conclude that risk of failure of business to peers and lack of RBI mandates are the obstacles to moving towards sustainability. The gaps in India are the awareness and consciousness on the environmental issues. Carbon Disclosure Projects- India requires public disclosure of emissions. This disclosure project is active in India. But the response is very less as only 8 signatories are there. The researchers feel that current management system needs to be integrated with the environmental and sustainable issues.

6. Yadav and Pathak (2013) study the Green Banking approaches opted by private and public bank for environment sustainability. Using case study approach they find that Indian banks have understood the relevance of taking positive steps towards the environment. Moreover results of the study conducted reveals that public sector banks have taken more initiatives as compared private sector with exception of ICICI bank. In private sector only ICICI bank’s approach is a sustainable approach.

7. Bahl (2012) highlights the means of creating awareness about Green Banking to ensure sustainable growth. Garrettt’s ranking technique is used to analyze the most 8

significant strategies in respect of Green Banking. If the goal is to attain sustainable development this can be achieved only through creating awareness and imparting education. Among the internal sub systems emphasis should be given to publications, newsletters so as to create awareness and effective means for external sub systems are event meetings, media and websites. A proper formulated green policy guideline is needed for effective Green Banking.

8. Sahoo and Nayak (2208) explore the relevance of Green Banking and site international experience in this respect. The researchers find that there has not been much initiatives by banks in India and thus policy measures are needed to promote Green Banking in India. The researchers reveal that none of the Indian banks have adopted equator principle and none of them is signatory to UNEP financial initiative statement. Indian banks should use environmental criteria for funding projects

9. Bahl, Sarita (2012)conducted an empirical study on “Green Banking –The new strategic imperative” tried to find out the most significant strategies while going ahead with green banking by using Garrett’s ranking technique. Researcher found that Carbon footprint reduction by Green building had been given top priority in green banking strategies and green banking financial products has also been given due weightage. However, Paper less banking and using mass transportation system has been rated low as green banking strategies.

10. Chaurasia (2014) in his paper “Green Banking practices in Indian Banks” highlighted the benefits, confronting challenges, strategic aspects of green banking and status of Indian banks regarding green Banking adoption. He found that there has not been much initiative in this regard by the banks in India. Investigator suggested that bank should go green and play proactive role to take ecological aspects as part of their lending principle, which would force industries International Journal of Interdisciplinary and Multidisciplinary Studies (IJIMS), 2015, Vol 2, No.4, 17-26. 19to go for mandated investment for environmental management, use of appropriate technologies and management systems.

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CHAPTER-3 THEORETICAL FRAMEWORK

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3.1 HISTORY OF GREEN BANKING Green Banking is any form of banking from that the country and nation gets environmentally benefits. An orthodox bank becomes a green bank by directing its core operations toward the betterment of environment. The banking sector can play an intermediary role between International Journal of Economics, Finance and Management Sciences 2015; 3(1): 34-42 35 economic development and environment protection by promoting environmentally sustainable and socially responsible investment. The concept of green banking was developed in the western countries. Green Banking was formally started in 2003 with a view to protecting the environment. Then the Equator Principles (EPs) were launched and were initially adopted by some leading global banks, such as Citigroup Inc, The Royal Bank of Scotland, Westpac Banking Corporation. In March 2009, Congressman Chris Van Hollen of USA introduced a Green Bank Act with the aim of establishing a green bank under the ownership of the US government. After introduce the Green Banking initial decision was to minimize the paper use in banking works because to make all kinds of papers need to cutting trees as raw materials (its minimize the green forestation) and for this reason naturally its reduce the Oxygen and increase the carbon-dioxide in airspace/ globe .There are two ways of green banking practices. One is in-house green banking; another is practice by the bankers in their business area. Creating clean and hygienic banking environment, green building, reforestation, online banking, waste management, installation of solar panel on the rooftop of the bank and using high mileage vehicles, reducing sound pollution, using webcam for video conferencing instead of physical meetings, online statements, emailing documents are included in the in house Green Banking. Financing the green projects like Biogas Plant, Solar/Renewable Energy Plant, Bio-fertilizer Plant, Effluent Treatment Plant (ETP), Projects having ETP etc, working on specific green projects, voluntary activities of banks are major practices by the bankers in their business areas. Green banking undertakes proactive measures to protect environment and to address climate change challenges while financing along with efficient use of renewable, non-renewable, human and natural resources.

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3.2 DEFENITION Green Banking is like a normal bank, which considers all the social and environmental factors; it is also called as an ethical bank. Ethical banks have started with the aim of protecting the environment. These banks are like a normal bank which aims to protect the environment and it is controlled by same authorities as what a traditional bank do. Green banking

is

like

a

normal

bank,

which

considers

all

the

social

and

environmental/ecological factors with an aim to protect the environment and conserve natural resources. It is also called as an ethical bank or a sustainable bank. They are controlled by the same authorities but with an additional agenda toward taking care of the Earth's environment / habitats / resources. For banking professionals green banking involves the tenets of sustainability, ethical lending, conservation and energy efficiency. There are many differences compared with normal banking, Green Banks give more weight to environmental factors, their aim is to provide good environmental and social business practice, they check all the factors before lending a loan, whether the project is environmental friendly and has any implications in the future, you will awarded a loan only when you follow all the environmental safety standards. Defining green banking is relatively easy. Green Banking means promoting environmental – friendly practices and reducing your carbon footprint from your banking activities. This comes in many forms 1. Using online banking instead of branch banking. 2. Paying bills online instead of mailing them. 3. Opening up accounts at online banks, instead of large multi-branch banks 4. Finding the local bank in your area that is taking the biggest steps to support local green initiatives. Green banking can benefit the environment either by reducing the carbon footprint of consumers or banks. Either a bank or a consumer can conserve paper and benefit the environment. Ideally, a green banking initiative will involve both. Online banking is an example of this. When a bank’s customer goes online, the environmental benefits work both ways. Green banking means combining operational improvements and technology, and changing client habits.

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3.3 FEATURES Some important features of green banking operations are as follows: 

Banks can help environment through automation and online banking.



Green banking focuses on social safety and security through changing the negative impacts of the society.



In financing, it always gives priority to investments / loans which consider risk factors regarding environmental conditions.



It always cares for sustainable and green growth in industrialisation and for social purposes.



It creates a congenial atmosphere inside and outside the bank.



It considers the clients as its family members, and as such, guides and supervises the projects to reduce pollution and thus implement scientific methods in the real sense by implementing environmental due diligence (EDD) checklist.



It reduces cost and energy, thus saving money and increasing GDP of a country.



It changes the mental faculties of the officials and customers, in line with green sensibilities.



It helps institutions, men and the nation in general live with dignity

3.4 BENEFITS OF GREEN BANKING 1. Avoids Paper Work: Paperless banking almost all banks in India are computerized or operate on a core banking solution (CBS). Thus there is ample scope for the banks to adopt paperless or less paper for office correspondence, audit, reporting etc. these banks can switch over to

electronic correspondence and reporting thereby controlling

deforestation. 2. Creating Awareness to Business People about Environment. Many NGOs and environmentalists are propagating environment consciousness among the public in general by arranging awareness programs and organizing seminars etc. Banks may associate themselves by sponsoring such programs. Besides, many corporate bodies are organizing similar program in their own line of business such as “free pollution check program” organized by a car manufacturer. Banks may tie with such corporate. These will help to brighten the image of the bank.

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3. Loans at Comparatively Lesser Rates: Banks can also introduce green bank loans with financial concessions for environment friendly products and projects such as fuel efficient vehicles, green building projects, housing and house furnishing loans to install solar energy system etc. 4. Environmental Standards for Lending: Banks follow environmental standards for lending, is really a good idea and it will make business owners to change their business to environmental friendly which is good for our future generations.

3.5 STEPS IN GREEN BANKING From the empirical study, it is found that following are some of the steps that can be taken for going green in banking: 1. Go Online: - Online banking is the developing concept in young and corporate India. Online banking helps in additional conservation of energy and natural resources. Online Banking includes: a. Paying bills online, b. Remote deposit, c. Online fund transfers and d. online statements. It creates savings from less paper, less energy, and less expenditure of natural resources from banking activities. Customers can save money be avoiding late payments of fees and save time by avoiding standing to queues and paying the bill from home online.

2. Use Green Checking Accounts: - Customers can check their accounts on ATM or special touch screens in the banks. This can be called as green checking of account. Using a green checking account helps the environment by utilizing more online banking services including online bill payment, debit cards, and online statements. Banks should promote green checking by giving some incentives to customers by giving higher rate of interests, waiver or discount in fees etc. 3. Use Green Loans for Home Improvements: - The Ministry of Non-renewable Resource in association with some nationalized and scheduled banks undertook an initiative to go green by paying low interest loans to the customers who would like to buy solar equipment. The rate of interest is as low as 4% p.a. Before you undertake a major home improvement project, study if the project can be done in an eco-friendly manner and if you might qualify for a green loan from a bank Green loan are perfect for energysaving project around the house.

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The new Green Home Loan Scheme from SBI, for instance, will support environmentally friendly residential projects and offer various concessions. These loans will be sanctioned for projects rated by the Indian Green Building Council (IGBC) and offer several financial benefits –a 5 per cent concession in margin, 0.25 per cent concession in interest rate and processing fee waiver.

4. Power Savings Equipments: - Banks can directly contribute to controlling climate change and as an initial step they intend to start a campaign to replace all fused GSL bulbs, in allowned premises offices and residential. Banks can also make a feasibility study to make rain water harvesting mandatory in all the Bank’s owned premises. In December 2009 Indusind Bank inaugurated Mumbai’s first solar-powered ATM as part of its ‘Green Office Project’ campaign titled ‘Hum aur Hariyali’. 5. Use Green Credit Cards: - Some of the banks introduced Green Credit Card. The benefit of using a green credit card is that banks will donate funds to an environmentfriendly non-profit organization from every rupee you spend on your credit card to a worthwhile cause of environment protection. 6. Save Paper: - Bank should purchase recycled paper products with the highest postconsumer waste content possible. This includes monthly statements, brochures, ATM receipts, annual reports, newsletters, copy paper, envelopes etc. Whenever available, vegetable-based inks are used instead of less environmentally friendly oil-based inks. 7. Use of Solar and Wind Energy: - Using solar and wind energy is one of the noble cause for going green. State Bank of India (SBI) has become the first bank in the country to venture into generation of green power by installing windmills for captive use. As part of its green banking initiative, SBI has installed 10 windmills with an aggregate capacity of 15 MW in the states of Tamil Nadu, Maharashtra and Gujarat. 8. Mobile Banking: - Mobile banking is tricky. On the one hand, it is great to have the ability to check balances, transfer funds or pay bills from your phone. One the other hand, it saves time and energy of the customers. It also helps in reducing use of energy and paper of the bank. Most of the Indian banks introduced this paper-less facility.

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3.6 MEASURES ADOPTED BY INDIAN BANKS Banks can reduce their carbon footprints by adopting the following measures: a. Paper-less Banking: As banks have computerized their branches, there is ample scope for doing paperless or less-paper banking. Mostly PSBs use huge quantities of paper for office correspondence, audit reporting, recording public transactions, etc. These banks can switch over to electronic correspondence and reporting. Banks should encourage their customers also to switch over to electronic transactions and popularise e-statements.

b. Energy Consciousness: Developing energy- consciousness, adopting effective office time management and automation solutions and using compact fluorescent lighting (CFL) can help banks save energy consumption considerably. Banks can conduct energy audits in all their offices for effective energy management. They can also switch over to renewable energy (solar, wind, etc.) to manage their offices and ATMs.

c. Using Mass Transportation System: PSBs can become fuel efficient organization by providing common transport for group of officials posted at one office.

d. Green Buildings: The Indian banking industry uses more than one lakh premises for their offices and residential houses throughout the country. These banks should develop and use green buildings for their office and employee accommodation.

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CHAPTER 4 DATA ANALYSIS

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This chapter includes the analysis and interpretation of collected data. The sample size is limited to 30 respondents. Judgemental sampling is used to select the respondents. Interview schedule is developed to attain primary data from the respondents and secondary data was also used. Data collected are analysed using statistical tools like simple charts, percentage etc. Wherever necessary, appropriate diagrams are used to represent the data. CLASSIFICATION BASED ON TYPE OF BANK TABLE 4.1 Type of bank

Number

Percentage

Public bank

16

53%

Private bank

14

47%

Source: Primary Data FIGURE 4.1

CLASSIFICATION BASED ON TYPE OF CHART

PRIVATE BANK 47%

PUBLIC BANK 53%

Source: Primary data INTERPRETATION: The table (4.1) can be interpreted as 53% of bank employees are from public bank and 47% of employees are from private banks.

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AWARENESS ABOUT THE CONCEPT OF GREEN BANKING TABLE 4.2 Awareness

Number

Percentage

Yes

30

100%

No

0

0

Source: Primary Data FIGURE 4.2

AWARENESS

YES

100

Source: Primary Data INTERPRETATION: This graph indicates awareness about concept of green banking. From this we can see that 100% of bankers are aware of green banking.

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FEEL ABOUT GREEN BANKING AS A NEW SYSTEM OF DELIVERING BANKING SERVICES TABLE 4.3 Name

Number

Percentage

Vital

9

30%

Essential

18

60%

Desirable

3

10%

Source: Primary Data

FIGURE 4.3

Feel About Green banking 60

30

10

VITAL

ESSENTIAL

DESIRABLE

Source: Primary Data

INTERPRETATION: This table shows feel about green banking.60% of employees feels that the green banking is essential.30% of employees feel that it is vital.10% of employees feel that it is desirable.

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INFORMATION PROVIDED BY BANKS TO CUSTOMERS ABOUT GREEN BANKING TABLE 4.4 Rank 1

Rank 2

Rank 3

Statements Numbe r

Percentag e

Numbe r

Percentag e

Numbe r

Percentage

Through Bank Officials

8

27%

6

20%

5

16%

Advertisement in print Media

10

33%

3

10%

6

20%

Television and Radio Advertisement

2

7%

11

37%

3

10%

Online Advertisement

1

3%

6

20%

8

27%

Through their Employers

9

30%

4

13%

8

27%

Total

30

100%

30

100%

30

100%

Source: Primary Data FIGURE 4.4

INFORMATION PROVIDED BY BANKS RANK 1 (%)

RANK 2 (%) 37

33

27 20

16

RANK 3 (%) 27

20 10

30

27

20 13

10

7

3

THROUGH BANK ADVERTISEMENT TELEVISION AND ONLINE THROUGH THEIR OFFICIALS IN PRINT MEDIA RADIO ADVERTISEMENT EMPLOYERS ADVERTISEMENT

Source: Primary Data INTERPRETATION: This table (4.4) can be interpreted that advertisement in print media is preferred as rank 1 and television and radio advertisement given second preference.

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METHODS USED BY BANKS FOR GOING GREEN TABLE 4.5 Rank 1 METHODS

Rank 2

Number

Percentage

Online saving account Paperless statements

3

Rank 3

Percenta ge 7%

Number

10%

Numbe r 2

2

Percenta ge 7%

3

10%

10

33%

5

16%

Use direct deposit

3

10%

0

0

3

10%

Online bill payments

3

10%

7

24%

13

44%

Reward debit and credit cards Net banking

2

7%

5

16%

4

13%

16

53%

6

20%

3

10%

Total

30

100%

30

100%

30

100%

Source: Primary Data FIGURE 4.5 METHODS RANK 1 (%)

RANK 2 (%)

RANK 3

(%) 53

44 33 24 16 10

7

7

10

ONLINE SAVING PAPERLESS ACCOUNT SATEMENTS

16 10

10

10

USE DIRECT DEPOSIT

ONLINE BILL PAYMENTS

7

20 13

10

REWARD DEBIT NET BANKING AND CREDIT CARDS

Source: Primary Data INTERPRETATION: This table (4.5) shows that the most method for going green is net banking gives rank 1 and paperless statements gives rank 2. The third rank gives to online bill payments. 22

MEASURES ADOPTED BY BANK TO REDUCE CARBON FOOTPRINT TABLE 4.6 Measures

Number

Percentage

Paper-less banking

20

66

Energy consciousness

3

10

Using mass transportation

7

24

0

0

system Green buildings

Source: Primary Data

FIGURE 4.6

USING MASS TRANSPORTATION SYSTEM 24%

Measures

ENERGY CONSCIOUSNESS 10%

GREEN BUILDINGS 0%

PAPER-LESS BANKING 66%

SOURCE: primary data INTERPRETATION: This graph indicates measures adopted by bank to reduce carbon foot print.66% of banks agreed with paper less banking.10% agreed with energy consciousness.24% agreed with massive transportation system.

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TRAINING ON GREEN BANKING SERVICES TO BANK EMPLOYEES TABLE 4.7 Training

Number

Percentage

Yes

22

73

No

8

27

Source: Primary Data FIGURE 4.7

Training on green banking services

NO 27%

YES 73%

Source: Primary Data

INTERPRETATION: This graph indicates training on green banking to bank employees.73% of employees get training where as 27%of employees does not get training.

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METHODS USED TO ENCOURAGE CUSTOMERS TO USE GREEN BANKING TABLE 4.8 Rank 1 Methods

Rank 2

3

Percenta ge 10%

Numbe Percenta r ge 2 7%

10%

6

20%

3

10%

7

23%

3

10%

4

13%

2

7%

2

7%

5

17%

Reminding customers through written communication

1

3%

4

13%

4

13%

Demonstration on how to use services Giving them guarantee of privacy and security Providing technological assistance to how to use banking services Total

0

0

2

7%

7

24%

8

27%

3

10%

4

13%

5

17%

7

23%

1

3%

30

100%

30

100%

30

100%

Reducing charges and fees Incentives to e-banking users Intensive advertisements Contacting customers personally

Numbe r 4

Percenta ge 13%

Number

3

Rank 3

FIGURE 4.8

Methods used to encourage customers RANK 1 (%)

13 10

7

10

10

RANK 3 (%) 24

23

20

RANK 2 (%)

10 13

17

13 13

7 7

3

7

27 10 13

17

23 3

INTERPRETATION: This graph indicates method used to encourage bank clients to use green banking. The factor in the highest no of Rank 1 was giving them guarantee of privacy and security and it is followed by intensive advertisements. Rank 2 was mostly obtained by providing technological assistance to how to use banking services. 25

PROBLEM FACED BY BANKERS IN IMPLEMENTING GREEN BANKING SYSTEM TABLE 4.9 Problems

Number

Percentage

Lack of through knowledge of technology

6

20%

Lack of confidence in automated transaction

7

23%

No direct interaction with the customer

3

10%

Fear about security

11

37%

All of them

3

10%

Source: Primary Data FIGURE 4.9

Problem

37% 23% 10% Lack of confidence in automated transaction

No direct interaction with the customer

10% Fear about security

All of them

Source: Primary Data INTERPRETATION: This graph shows the problem faced by bankers in implementing green banking.37% of banks fear about security.23% of banks has lack of confidence in automated transaction.20% of banks has lack of knowledge about technology.

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NEEDS OF GREEN BANKING TABLE 4.10 NEEDS

Number

Percentage

Using oraganisational resource effectively To minimise paper work

4

13%

10

33%

To compete with the market

5

17%

To achieve cost and time efficiency

9

30%

Minimise paper work and achieve cost and time efficiency

2

7%

Source: Primary Data

FIGURE 4.10

Needs of green banking 35 30 25 20 15 10 5 0

Source: Primary Data INTERPRETATION: This graph shows needs of green banking.33% of banks minimize paper works.30% of banks achieve time and efficiency.17% of banks complete with the market.

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DIFFICULTIES IN GREEN BANKING TABLE 4.11 DIFFICULTIES

Number

Percentage

WRONG TRANSFER

7

23%

SEVER BUSY

11

37%

NOT UPDATING THE

10

33%

2

7%

TRANSACTION IN TIME ALL OF THEM

Source: Primary Data FIGURE 4.11

ALL OF THEM 7%

Difficulties in green banking

WRONG TRANSFER 23%

NOT UPDATING THE TRANSACTION IN TIME 33%

SEVER BUSY 37%

Source: Primary Data INTERPRETATION: This graph shows difficulties in green banking.37% of banks faced server busy.33% of banks faced not updating the transaction in time.23% of banks faced wrong transfer.

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METHODS FOR ADOPTION OF GREEN BANKING 

PERCEIVED USEFULNESS OF GREEN BANKING TABLE 4.12 DIS AGREE

NEUTRAL

AGREE

STATEMENTS Number Percentage Number Percentage Number Percentage INCREASE THE QUALITY OR OUTPUT OF GREEN BANKING INCREASE REVENUES OR PROFITS SERVE CUSTOMERS BETTER

0

0

4

13%

26

87%

2

7%

3

10%

25

83%

0

0

5

17%

25

83%

SOURCE: primary data FIGURE 4.12

PERCEIVED USEFULNESS DISAGREE

NEUTRAL

AGREE

83

87

10 7 INCREASE THE QUALITY INCREASE REVENUES OR OUTPUT OF GREEN OR PROFITS BANKING 13

83 17 SERVE CUSTOMERS BETTER

SOURCE: primary data INTERPRETATION: This graph shows perceived usefulness of green banking.87% of employees agreed with increase the quality or output of green banking.83% of employees are agreed with increase revenues or profits.83% of employees agreed with serve customers better. 29



PERCEIVED EASE OF USE TABLE 4.13

STATEMENTS Learning to use green banking services would be easy Interaction with the green banking is clear and understandable Easy to use green banking services to accomplish banking task

DIS AGREE NEUTRAL AGREE Number Percentage Number Percentage Number Percentage 2 7% 5 17% 23 76%

0

0

5

17%

25

83%

0

0

5

17%

25

83%

SOURCE: primary data FIGURE 4.13

PERCEIVED EASE OF USE DISAGREE

NEUTRAL

AGREE

76

83

83

17 7

17

17

Learning to use green Interaction with the Easy to use green banking services would green banking is clear banking services to be easy and understandable accomplish banking task

SOURCE: primary data INTERPRETATION: This graph shows perceived ease of use.76% of employees agreed with learning to use green banking services would be easy.83% of employees agreed with interaction with the green banking is clear and understandable.83% of employees agreed with easy to use green banking services to accomplish banking task.

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

COMPETITORS PRESSURE

STATEMENTS Some our

TABLE 4.14 DIS AGREE NEUTRAL Number Percentage Number 5 17% 0 0

AGREE Number Percentage 25 83%

competitors have already started providing green banking services It is easy for our

2

7%

6

20%

22

73%

customers to switch to another company for similar services.

SOURCE: primary data FIGURE 4.14

Competitors pressure disagree

neutral

agree

73

83

20

17

7

competitors have already started providing It is easy for our customers to switch to another green banking services company for similar services.

SOURCE: primary data INTERPRETATION: This graph shows that competitors pressure.83% of bank employees is argued with the argument competitors have already started providing services.17% is disagreed with this. 73% are agreed with it easy for customers to switch to another company for similar services.20% is neutral to this argument. 31



MANAGEMENT COMMITMENT AND SUPPORT TABLE 4.15 DIS AGREE NEUTRAL Number Percentag Numbe Percentag e r e 3 10%

Statements Management is

AGREE Numbe Percentag r e 27 90%

interested in the use of green banking services in banking operation. /We have the necessary technical, managerial and other skills to implement green banking

13%

5

17%

21

70%

4

SOURCE: primary data FIGURE 4.15

Management commitment and support disagree

90

10

neutral

agree

70

17 13

Management is interested in We have the necessary the use of green banking technical, managerial and other services in banking operation. skills to implement green banking

SOURCE: primary data INTERPRETATION: This table shows that management commitment and support.90% of banks are agreed with the statement their management is interested in the use of green banking operation.70% of banks have technical and managerial skills to implement green banking. 32

CHAPTER-5 FINDINGS, SUGGESTION AND CONCLUSION

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FINDING, SUGGESTION AND CONCLUSION Findings and suggestion are based on the topics “Green banking practices in scheduled commercial bank” is conducted in Perumbavoor. The data is collected from 30 respondents through questionnaire.

5.1 MAJOR FINDINGS  Almost 53% of respondent are engaged in the public sector. Rest of 43% are in private sector.  In this project all respondents are familiar with the concept of green banking.  It can be analysed from the study 60%of respondents argued that green banking is essential as a new system of delivering banking services.  This study gives clear idea that bank use mainly advertisement in printed media to provide information to customers about green banking.  This study reveals that net banking is the most common method used by banks for going green.  66% of respondents give clear idea that they practices paper less banking is a measure used to reduce carbon footprint.  We can understand that 73% of employees get training on green banking services.  Most of the respondents state that giving customers privacy and security is the most common method used to encourage customers.  We can understand that main problem faced by bankers in implementing green banking is fear about security.  This study reveals that 33% respondent’s state that green banking is used to minimize paper work.30% of respondents argued that it is used to achieve cost and time efficiency.  We can understand that server busy and not updating transaction in time is the difficulties in green banking.  Perceived usefulness, perceived ease of use, competitor’s pressure, management commitment and support are factors for adoption of green banking.

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5.2 SUGGESTIONS 

Construct a Website and Spread the News.



Educate through the Bank’s Intranet and Public Website.



Participate in Events.



Set up outlets to promote green business.



Communicate through the Press.



Disseminate info through Leaflets.



Social Responsibility services done by banks.



Carbon footprint reduction by energy consciousness.



Carbon footprint reduction by mass transportation.



Impart education through E-learning Programmes.



Makin g it a part of annual environment report.

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5.3 CONCLUSION Green Banking has become a buzz word in today’s banking world. For going green products, electronic compliances, motor vehicles etc. for eco-friendly atmosphere. Automation and improved in house green activities, required and rigorous training program for top/mid/lower level management and at the same time clients as well need to be carried on. Board/Competent authority should be aware and updated of the current green banking activities and development. Green Banking now is not only limited to awareness but also in practice. It is now expected from all scheduled banks that they would not only allocate budget for green finance, green event or green projects under CSR activities, green marketing and capacity building but ensure the efficient utilization of budget allocation. Finally we can say that going green should be the motto of all commercial banks

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BIBLIOGRAPHY 1. Jan Willem van Gelder, (2006), “Sustainable Banking in Practice: A closer look at the nominees for the 2006 Financial Times Sustainable Banking Awards”, Banktrack., 2.

Leslie D Monte, ‘It’s Times for green banking’, Susiness Standard, May 21,2010.

3. Ritwik Mukharjee, ‘SBI launches green policy for paperless banking’, Financial Chronicle, August 27,2010. 4. www.greenbank.com 5. Green, C.F. “Business Ethics in Banking”. Journal of Busines Ethics 8.8 (1989): 631-634 6. Nath, Nayak & Goe(2014), “Gren Banking Practices-A Review”, Vol.2. 7. www.wikipedia.com

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QUESTIONNAIRE Dear Sir / Madam, This questionnaire is a part of the dissertation work tiled “GREEN BANKING PRACTICES IN SCHEDULED COMMERCIAL BANKS”. I hereby declare that the data collected through this questionnaire will be used only for academic purpose. PERSONAL INFORMATION ABOUT THE RESPONDENT 1.

I) Type of Bank:

Private Bank

Public Bank

PART-2 1. Are you aware about the concept of “Green Banking”? (a) Yes

(b) No

2. In general what do you feel about Green Banking as a new system of delivering banking services? a) Vital b) Essential c) Desirable

3. How do you let your customers know about Green-banking services you provide? (Rank the following) a) Through bank officials b) Advertisement in Print Media c) Television and Radio Advertisement d) On line Advertisement e) Through their employers 4. Rank the following methods used by your Bank for going Green in banking? a) Online Saving Account b) Paperless Statements c) Use Direct Deposit d) Online Bill Payments e) Reward Debit and Credit Cards f) Net Banking 38

5. Which are the following measures adopted in your bank to reduce carbon footprints? a) Paper-less Banking b) Energy Consciousness c) Using Mass Transportation System d) Green Buildings 6. Do you get Training on Green Banking Services? a) Yes

b) No

7. Rank the methods you use to encourage your bank clients to use Green banking? a) Make them cheaper by reducing charges and fees b) Incentives to E-banking users c) Intensive advertisement d) Contacting every customer personality e) Keep on reminding customers through written communication f) Demonstrating on how to use services to them g) Giving them guarantee of security and privacy h) Providing Technological know-how to the customers to use green banking Services 8.

What is the problem faced by the bankers in implementing Green banking system? a) Lack of through knowledge of technology b) Lack of confidence in handling automated transactions c) No direct interaction with the customer d) Fear about security

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9. What are the needs for green banking? a) Using the organisational resource effectively and responsibly b) To minimize the paper work as much as possible and reduce carbonfootprint c) To compete with the market d) To achieve cost and time efficiency 10. Difficulties in Green Banking a) Wrong transfer b) Server busy c) Not updating the transaction in time

PART 3 METHODS FOR ADOPTION OF GREEN BANKING Use the following key to indicate your level of Agreement with the following statements. (A=Agree N= Neutral D= Disagree) 1. Perceived usefulness Statements

A

Using green banking would increase the quality or output of banking The adoption of green banking would help increase our revenues/profits. The adoption of green banking would help us to serve our customers better.

40

N

D

2. Perceived ease of use A

N

D

I think that learning to use green banking services would be easy. I think that interaction with green banking services does not require a lot of mental effort. My interaction with the green banking is clear and understandable.

3. Competitors pressure

A

N

D

Some our competitors have already started providing green banking services It is easy for our customers to switch to another company for similar services. 4. Management commitment and support A Management is interested in the use of green banking services in banking operation. We have the necessary technical, managerial and other skills to implement green banking

41

N

D